Rusagrotrans expects record wheat exports in July - Russian wheat prices are rising both on the domestic and global markets

Export prices for wheat from Russia have increased significantly over the past week, Pole.rf reports, citing data from the Rusagrotrans analytical center. According to experts, this is due to the news about Russia's withdrawal from the "grain deal". It is expected that the export of wheat in July may reach a new historical record for this month of 4.1-4.2 million tons, including deliveries to the EAEU countries. The previous record was set in July 2018 and amounted to 4 million tons.

According to the center's monitoring, export prices for wheat with protein 12.5% for delivery in August rose to more than $240 per ton FOB. Over the week, the price increased by $12.5 per ton. Prices for American wheat reached $257 per ton (+$12), for French - $268 per ton (+$19). Russia's withdrawal from the "grain deal", damage to grain terminals in the ports of Odessa and Chernomorsk, as well as the statement of the Russian Ministry of Defense that ships sailing in the Black Sea would be considered potential carriers of military cargo, led to a sharp strengthening of the wheat exchange market, analysts noted.

According to their data, prices for wheat (grade 4, 12.5% protein) in deep-water ports strengthened to 16.5 thousand rubles/t without VAT, while in low water they remained unchanged - 14.5 thousand rubles/t. Last year, prices were 14.1 thousand rubles/t for deep water and 12.6 thousand rubles/t for shallow water.

The domestic wheat market strengthened in the South, where prices for wheat of the 4th grade (EXW elevator) reached 14.5-15.1 thousand rubles. per ton. In other regions, market activity was low, prices remained unchanged. Analysts believe that the decrease in precipitation in the South of Russia contributes to the acceleration of harvesting of wheat and barley. However, rains in the Central Federal District and in the northern part of the Volga region slow down harvesting. Precipitation in the Urals and Siberia is favorable for spring crops, but hot weather prevents a significant increase in soil moisture.

Director General of the Institute for Agricultural Market Studies (IKAR) Dmitry Rylko told Agroinvestor that wheat exports could reach 3.8 million tons in July. According to him, high demand, rising prices and the depreciation of the ruble contribute to shipments. At the same time, the export is hindered by a lag in harvesting. As of the end of last week, despite the good yield, the wheat harvest was the lowest on this date in the last five years, the expert said. The reason for this was the weather.

There are also problems with grain quality, Rylko continues. This is also a factor in complicating exports. In addition, shipments from the port of the Sea of Azov have not yet recovered. According to the expert, wheat prices are now increasing both domestically and for export. Thus, the export value of wheat is now at $242 per ton.

Last week, at the conference “Where is the margin in 2023,” Rylko said that wheat exports in the current agricultural year could reach 46 million tons (48.1 million tons last season). The Ministry of Agriculture estimates grain exports in the 2022/23 season at more than 55 million tons, including 45 million tons of wheat, and the export potential for grain in the new agricultural year is at 55 million tons.

Andrey Baklanov, Professor of the Department of Foreign Regional Studies at the Faculty of World Economy and World Politics at the National Research University Higher School of Economics, told RIA Novosti on July 22 that Russia, against the background of Kiev’s actions after the termination of the “grain deal” and the aggravation of the situation in the Black Sea region, could redirect its grain exports through the North-South corridor.