Russian domestic wheat prices have reached the lowest level since 2019
On March 29, 2023, the average Russian domestic third-grade wheat price in Russia dropped to RUB 11,550 (USD 147) according to SovEcon’s estimates. This is the lowest recorded price since November 27, 2019. The decline is attributed to high wheat supply and weak demand from exporters.
Wheat availability remains high amid record Russian wheat stocks in 2022/23 (July-June). According to Rosstat, wheat stocks in agricultural organizations reached 17.4 million tons (MMT) on March 1, which is 82 percent higher than the five-year average.
However, demand for wheat is declining due to relatively low export activity. The National Commodity Exchange estimates the volume of outstanding wheat sales at 2.1 MMT on April 3, up from 2.5 MMT the previous week.
The decline in exporters’ demand is due to falling wheat export prices, with SovEcon estimating the average FOB price of Russian wheat on March 22 at 279 USD/MT, the lowest level since August 2021. Exporters are likely to pause and anticipate even lower prices in the near term.
Low domestic prices are likely to support active wheat shipments from Russia in the next few months. However, SovEcon does not expect the country to increase exports significantly from current levels due to infrastructure bottlenecks. In addition, several of the largest commodity trading companies have announced their intention to stop trading Russian grain altogether, making it difficult for Russia to even maintain its current exports.
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