Russia is the largest global wheat exporter.
Current Reports
Two sources with information reported on the 24th of March that Russia doesn’t have any plan to halt wheat exports and that the country wants exporters to ensure that high enough prices to cover average production costs are paid to farmers. This would entail maintaining Wheat Export prices at or above $275 to $280 per tonne, they continued.
Following a sharp decline in global prices in recent weeks, the Russian Vedomosti business daily earlier on March 24 reported, citing two unnamed sources, that Russia may recommend a temporary suspension of wheat and sunflower exports. The sources reinstated that there is no such plan.
Concerns Expressed By The Russian Government
As per one of the trade sources, the Russian Government, however, became concerned about local farmers receiving enough money for their wheat to cover costs after recent drops in wheat prices in Chicago and Paris and has advised exporters to avoid prices below those close to the current ones.
According to the second source, Russia advised its exporters to set a wheat export price “until further notice” that is not less than $275 per tonne. He added that those who disobey may have trouble obtaining the phyto certificates required for export.
Wheat Pricing
The cost of Russian wheat delivered free on board (FOB) from Black Sea ports with a protein content of 12.5% decreased by $13 to $277 per tonne in the previous week, according to the agriculture consultancy IKAR. On Friday, wheat prices in Chicago Wv1 rose, reversing a four-session decline and moving up from a 20-month low set on March 22, 2023. The Vedomosti report helped the market.
“In the physical grain market, much more serious factors matter – food security, consumption per capita, logistical and infrastructure constraints, and of course the cost of production,” the Russian Union of Grain Exporters wrote on social media on Friday. “There is no need for discussion here,” it continued. No one will sell items for less than production costs, which, in terms of FOB, are roughly current prices.
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