Russian Wheat Prices Drop, Shipments to Reach 16-Year Low

Russian wheat export prices fell last week, but some analysts said they regarded the prices as largely symbolic as shipments from southern ports have been virtually halted due to the escalating conflict with Ukraine.    

Export prices in the Baltic region — where the bulk of shipments are most likely to be redirected due to its ability to handle them — were significantly higher than in Novorossiysk, but changed little over the week.

The bulk of shipments via ports in the Azov-Black Sea basin were halted throughout last week due to ongoing attacks on vessels and damage to terminals.

Shipment volumes are approaching 2010 lows, and domestic prices are in free fall.

The price of Russian wheat with 12.5% protein content for free-on-board delivery in late September was down $5 at $210 per ton at the end of last week, compared with the previous week, said Dmitry Rylko, head of consultancy IKAR. 

     "We have a record spread between Romanian wheat and ours. In other words, we are not fully integrated into the global market," said Rylko.

      The FOB Baltic price for the same grade of wheat remained at around $248 per ton, he added. 

SovEcon put last week's prices for Russia's wheat with 12.5% protein at between $213 and $215 a ton, compared with $220 to $222 the previous week.  

"However, we consider these prices largely notional, as it is unclear whether anyone is willing to buy on an FOB basis given the lack of available vessels," SovEcon head Andrey Sizov said.

Rusagrotrans has lowered its export forecast for this month to 1.8 million tons, SovEcon to 1.9 million tons from 2.2 million tons a week earlier, and IKAR to around 2.0 million tons from 2.1 to 2.6 million tons last week.

On Saturday, Russian President Vladimir Putin said that Russia had "issues" related to the export of goods, but these would be resolved, "which means there will be no shortage on the global market."

More Russian data released by SovEcon and IKAR:

 (Reuters)