Russia’s MY 2021-22 wheat export pace remains weak, prices stay firm

The pace of wheat sales from Russia for marketing year 2021-22 (July-June) remained weak as the world’s largest wheat exporter further raised taxes on exports.

During July 1-Oct. 28, Russia exported 15.3 million mt of wheat, down 14% over the year, according to data released by the Russian Federal Service for Veterinary and Phytosanitary Surveillance on Nov. 1.

Russia’s cumulative wheat exports for the year were at 14.7 million mt till Oct. 21.

Turkey remained the largest buyer of wheat from Russia, having purchased 3.1 million mt as of Oct. 28 in MY 2021-22, followed by Egypt at 1.9 million mt. Kazakhstan overtook Saudi Arabia to become the third largest buyer of wheat from Russia, having increased its purchases to 800,000 mt.

S&P Global Platts Analytics has projected Russian wheat exports at 36.5 million mt in MY 2021-22.

In MY 2020-21, Russia had sold 38.5 million mt of wheat, according to data from the US Department of Agriculture.

The pace of Russian wheat exports has been declining since August as the taxes on exports have been consistently rising, traders said.

Wheat prices remain firm

S&P Global Platts assessed FOB Russia 12.5% protein wheat at $322.50/mt on Nov. 1, up $3.25 from Oct. 29.

Russia’s wheat prices have increased more than 4% over the past two weeks due to supply tightness, analysts said.

The momentum of exports is expected to decline more in the coming week as well, with taxes increased further, traders added.

Russia has increased export taxes on wheat by $2.90 from this week to $69.90/mt for the Nov. 3-9 week, according to a notification from the agricultural ministry Oct. 29.

Russia introduced the floating rate in June, replacing the fixed rate mechanism of Eur50/mt ($58.78/mt). The duty is applied when the export price of wheat exceeds $200/mt and is calculated as 70% of the difference between the market price and that benchmark.

Harvest progress

Russia’s wheat harvest for MY 2021-22 has almost reached an end. It has harvested 77.9 million mt wheat as of Oct. 29, nearly 11% below the 87.5 million mt produced during the same period the previous year, according to the country’s agricultural ministry.

Russia’s wheat output is expected to decline in MY 2021-22 due to dry weather conditions, particularly in the Urals and Volga regions.

Platts Analytics scaled down its MY 2021-22 projection for Russia’s wheat crop to 77.6 million mt. Russia harvested 85.9 million mt of wheat in MY 2020-21.

Spglobal.com

Tags: Russia, price, wheat