Export demand for the Russian wheat and new sales faded at the end of last week, mainly due to geopolitical risks, analysts said on this morning.
Navigation in the AzovSea was stopped on Feb. 24.
However Russian BlackSea terminals continue to load and ship grain.
Indeed, according to Eduard Zernin, chairman of the board of the Union of Grain Exporters, shipments of Russian grain abroad continue, even if there are very few new deals.
“The situation is working, deep-water ports are working, shipments are going on. No one refuses deals on the part of importers, as everyone needs grain.”
However, “it’s true, there are only negligible new deals” as “traditional Russian wheat buyer are diversifying their geography of suppliers” thus, “for this reason, we do not expect high demand for Russian grain in the coming months” he added.
Also, there is till a big question mark over new shipments due to a lack of freight offers, Sovecon said.
According to IKAR, “there are almost no sales,” adding that it estimates the current “virtual” price for Russian wheat with 12.5% protein content from the Black Sea ports at $340 per tonne free on board (FOB).
According to SovEcon, meantime, Russian wheat fully stopped on Feb. 24.
Thus, according to Zernin, in this situation, Russian exporters are likely to take a wait-and-see approach to purchases even in the domestic market.
Before that, the export price was at $314 per tonne, according to Sovecon.
Meantime, according to the Ministry of Agriculture, the Russian Federation exported 27.5 million tons of grain from July 1, 2021 to February 24, 2022, which is 28.7% less than a year earlier (38.6 million tons).
Including export of wheat amounted to 22.5 million tons (30% less), barley – 2.9 million tons (31.3%), corn – 1.7 million tons (12.1%).
Russia, according to Sovecon, has around 7-7.5 million tonnes of wheat to export by the end of June and 1-2 million tonnes of corn.
Also, Sovecon estimates that Ukraine has around 6 million tonnes of wheat left to export in the 2020/21 July-June season and 13-14 million tonnes of corn.
Meantime, prospects for Russia’s and Ukraine’s spring grain, which is supposed to start soon, could be affected by the conflict, as farmers need to start fieldwork shortly and there is a big question mark over their operation especially in Ukraine, Sovecon said.
