Russian Wheat Export Prices Dip Again Last Week Amid Rising Shipments

Russian wheat export prices sustained a downward trend throughout the previous week, coinciding with a global decline in prices and a moderate uptick in shipment volumes. The price for 12.5% protein Russian wheat, scheduled for free-on-board (FOB) delivery from late March to early April, stood at $219 per metric ton. This figure represented a $5 decrease compared to the previous week's valuation. These consecutive drops in pricing underscored the ongoing pressure on Russian wheat export values amidst prevailing market conditions.

Against the backdrop of robust domestic wheat reserves, the Russian Agriculture Ministry proposed a significant increase in the export quota for the ongoing season. The proposed quota adjustment would see an additional 4 million tons allocated, bringing the total export quota to 28 million tons. This move reflects the authorities' efforts to manage the surplus supply situation within the country while also addressing the demands of the international market.

In terms of actual export activities, Russia witnessed a notable increase in grain shipments during the reviewed period. Grain exports totaled 1.20 million tons for the week, representing a marked rise from the 0.86 million tons exported in the preceding week.

An upward revision in the estimated wheat exports for February, with projections now standing at 3.3 million tons. This figure represents a notable increase from the 3.0 million tons exported during the same period last year. Arkady Zlochevsky, head of the Russian Grain Union, highlighted the prevailing market dynamics during a briefing, emphasizing the challenges posed by both weather conditions and commercial factors. Zlochevsky also alluded to the adverse effects of an undisclosed restriction from the Agriculture Ministry regarding the minimum export price, further complicating the pricing landscape.

One notable observation amidst the declining prices is that Russian wheat values continue to exceed those of competitors in the global market. This discrepancy was highlighted during the Egyptian GASC tender conducted last week, where 180,000 tons of Ukrainian and Romanian wheat were purchased. Russian offers, priced at $245 FOB (180-day LC), stood higher than competing bids. This pricing misalignment is indicative of the persisting challenges faced by Russian exporters in remaining competitive on the international stage.

It is noteworthy that all Russian offers were aligned with an unofficial "price floor" of $235, underscoring the prevailing market dynamics and the constraints imposed by pricing pressures. These developments underscore the intricate interplay between domestic policies, international market dynamics, and commercial considerations shaping the trajectory of Russian wheat exports.