MOSCOW- Russian wheat export prices continued to decline last week following a drop in global markets, while shipments also fell amidst challenging weather conditions, analysts said.
The informal restriction of the export price by the Russian Ministry of Agriculture also remains one of the influencing factors, they said.
The price of 12.5 percent protein Russian wheat scheduled for free-on-board (FOB) delivery in the second half of February to the first half of March was $238 per metric ton, down $4 from the previous week, the IKAR agriculture consultancy reported.
According to IKAR, last week’s drop in prices on world markets overlaid the price dynamics, while weather conditions continue to restrain shipments.
The situation in the Red Sea has not yet had a significant impact on Russian grain exports, said IKAR head Dmitry Rylko.
The Sovecon agriculture consultancy pegged the same class of wheat at $240-243 a ton FOB compared to last $243-246 a week ago.
The global wheat market dropped sharply at the beginning of the week and has been gradually recovering since, the agency noted.
Last week, Egypt’s state grains buyer bought 300,000 metric tons of Russian wheat again, as in two previous tenders, at $265 FOB (270-day payment delay).
Russia exported 0.65 million tons of grain last week, down from 0.75 million tons the previous week. The exports included 0.58 million tons of wheat (0.64 million tons a week ago), Sovecon wrote, citing port data.
Sovecon lowered its January wheat export forecast by 0.2 million tons to 3.6 million tons versus 3.9 million tons a year ago, Sovecon wrote.
“Russian outstanding wheat export (contractual volumes registered by exporters at National Mercantile Exchange (NAMEX) tumbled this week to 1.9 million tons (the lowest since early November) from 3.2 million tons a week ago,” Sovecon noted.
“This could support the popular ‘no demand’ bearish narrative but we think it’s a neutral/bullish story. Russia’s sales are modest not because there is zero global demand but because AgMin is trying to limit sales at current prices,” it added.
“The problem is current slow sales are unlikely to be fully offset later because of infrastructure bottlenecks implying that the market could be estimating total 2023/24 exports too optimistically.”
Meanwhile, Romania’s Black Sea port of Constanta recorded its highest grain exports in 2023 thanks to a surge in shipments from Ukraine and ongoing European Union-funded infrastructure projects, the port authority told Reuters on Wednesday.
The port shipped 36 million metric tons of grain last year, it said, up 50 percent from the previous year.
Ukrainian grain accounted for roughly 40 percent of the total, or 14 million tons, up from 13.0 million at the end of November and from 8.6 million in the whole of 2022.
Ukraine is one of the world’s biggest grain exporters, and Constanta has become Kyiv’s largest alternative export route since Russia’s full-scale invasion in February 2022, with grains arriving by road, rail and barge across the Danube.
But its transit volumes have fallen since July when Russia began repeatedly striking its river ports that lie across the Danube from European Union and NATO member Romania.
In August, Ukraine created a shipping corridor from its own ports which hugs the western Black Sea coast near Romania and Bulgaria, shortly after Russia withdrew from a 2022 UN-brokered Black Sea grain export deal and threatened to treat all vessels as potential military targets.
Earlier this week, it said it has exported 10 million tons of agricultural goods through the corridor.
Romania aims to boost its transit capacity for Ukrainian grain to 4 million tons per month, and is currently upgrading rail and road infrastructure in and around the port.