Russian export activity slows as export quotas near exhaustion

The pace of Russian wheat exports slowed for the third consecutive week in the context of exhausted opportunities for suppliers – as total volumes approach the quota limit – while a strong ruble on international currency markets also cuts exporting incentives, Fastmarkets Agriculture analysis of port line-up data showed Monday.

In the week of May 22, wheat volumes from Russian ports came to just over 244,000 tonnes, including 137,300 tonnes heading to Iran, 53,000 tonnes to Libya, 40,100 tonnes to Israel, and 13,700 tonnes to Egypt.

Furthermore, port data showed around 279,250 tonnes of Russian wheat under loading currently and listed in the line-up to depart during the following week.

Egypt was marked as the destination for 69,250 tonnes, with 40,000 tonnes expected to move to Nigeria, and 40,000 tonnes to Turkey, while the data did not yet show the destination for the remaining balance of just over 130,000 tonnes.

Domestic forecasters have raised their Russian wheat export outlook in May from 900,000 tonnes to 1 million tonnes but warned that in June, against the backdrop of high global prices, it may rise to 1.3 million tonnes.

That would be half the volume exported at the same point of last year when exports increased sharply due to the transition from a fixed duty of €50 per tonne to a floating duty mechanism.

During the reporting week, export prices continued to rise, while prices of the future crop grew more actively, along with global price rises due to the imposition of restrictions on the export of Indian wheat and a significant reduction in its export potential.

Indicative export prices for Russian wheat with 12.5% protein for May-June delivery continued to rise, reaching $410-415 per tonne FOB, up $25 per tonne versus the previous week, according to Fastmarkets Agricensus data.

The decline in exports is also associated with the exhaustion of quotas allocated to many exporters at the beginning of the season.

Over two thirds of the eight million tonnes wheat export quota was already thought to have been exhausted, with a number of large exporters either already exhausting their allocation or are close to it.

All the above brings the total wheat exports from Russia to around 30.3 million tonnes, while the USDA estimates exports from Russia in the 2021/22 marketing year could reach 33 million tonnes.

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