Strong export demand leads to sharp rise in Russian wheat prices

02-Aug-2024 01:23 PM

Moscow. A leading analyst firm says that at the end of last week, the price of Russian wheat with 12.5 percent protein rose sharply by 1000 rubles compared to the previous week to reach 15,500/16,000 rubles per tonne at deep sea ports.

This is the biggest increase in the price of Russian wheat after the last week of May. The price of wheat has risen due to the possibility of relatively low domestic production and strong export demand.

The price of wheat with 12.5 percent protein content in the southern part of Russia rose by 650 rubles to reach 14,550 rubles per tonne, while in the central region its price remained at the old level of 11,600 rubles per tonne.

During recent weeks, the demand of exporters has increased significantly in the southern part of the country and due to high prices, the producers are also showing great activity in selling their stocks. The outstanding wheat sales volume rose to 3.2 million tonnes as of July 30, up 6 million tonnes from June 30's 2.6 million tonnes.

During July 2024, Russian exporters showed tremendous interest in wheat sales through tenders. African country Egypt's government agency GASC purchased 7.2 million tonnes of wheat from Russia in July through tenders.

Similarly, Algeria's OAIC agency purchased a total of 6 to 8 million tonnes of wheat, some of which will be supplied from Russia.

Although Turkey, an important buyer of Russian wheat, has banned the import of this important food grain till mid-October,

this is not causing any particular problem to Russian exporters as it has found many new markets as an alternative. In July 2024, 3.2 million tonnes of wheat was exported from Russia,

which was more than the five-year average of 3 million tonnes but much less than the July 2023 shipment of 4.5 million tonnes. Russia is the world's largest exporter and third largest producer of wheat.