In June, Russian exporters launched the tender process for their new wheat harvest, fixing a price of 14,500 rubles per tonne, Sovecon, said a leading analytical agency focused on the agricultural markets in the Black Sea region.
This figure, when converted using the exchange rates in force at the time, resulted in $ 184 per tonne.
The prices of wheat a year ago amounted to 15,250 rubles per tonne ($ 173 / MT).
This early establishment of offers for the new harvest indicates the start of major commercial activities and provides an initial reference for the next wheat season on the international market.
The price set by Russian exporters will likely influence the world prices for wheat and purchasing strategies, especially for countries dependent on Russian cereal exports.
New crop prices
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The agricultural markets in Russia experienced a significant slowdown in the prices of new cultures at the start in mid-July 2024.
This decrease saw the prices reaching a hollow of 14,750 Russian rubles per tonne, equivalent to around $ 167 per tonne, according to data from Sovecon.
This mid -summer diving can be attributed to a confluence of factors, potentially including favorable early harvest forecasts, an initial increase in the offer striking the market and moderate demand signals at this precise moment.
However, this downward trend has proven to be temporary.
From mid-July and continuing during the rest of the year, the new prices for cultures have embarked on a regular increase.
This recovery culminated in October, when prices culminated at 17,900 rubles per tonne, about $ 186 per tonne, said Sovecon.
Export quotes
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Meanwhile, Russian wheat export quotes experienced a slight drop from last week, set up at around $ 226 to $ 230 per tonne, according to Sovecon.
This figure represented a modest decrease compared to the prices observed a year earlier, which varied from 234 to $ 236 per ton.
Analysts closely follow these changes, because Russia remains a critical player in the international trade in wheat, and its export volumes considerably influence the world prices of food products.
The slight drop in prices could be awarded to a number of factors, including potentially larger harvest forecasts, increased competition from other major wheat producing nations or changes in international purchasing models.
In the immediate future, Russian wheat export quotes are expected to face the downward pressure, noted Sovecon.
Export prices are likely to remain lower
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This expected decrease in export prices is mainly awarded to two important factors: the imminent arrival of the new harvest and a potential drop in free prices on board (FOB).
The influx of wheat freshly harvested on the market will naturally increase the supply, which, in the absence of a corresponding increase in demand, generally leads to a reduction in prices.
In addition, any softening of FOB prices, which represents the cost of the goods loaded on a ship of the port of origin, would result directly by lowering export costs and, therefore, reducing selling prices.
Sovecon added:
The difficult financial situation can lead to a more active sale by farmers who need to reconstruct the working capital.
On the other hand, support could be reinforced by a potential reduction in the export tax, low stock levels and non -exceptional harvesting prospects in the southern region of Russia.
In addition, current CPT prices (paid transport) already seem undervalued compared to dominant FOB levels.
