Russia's MY 2021-22 wheat exports fall 16%, prices rebound

The pace of wheat sales from Russia for marketing year 2021-22 (July-June) slowed, as the world's largest wheat exporter increased taxes on exports of the food grain sharply.

Russia exported 16.6 million mt of wheat between July 1-Nov. 11, down 16% on the year, according to data released by the Russian Federal Service for Veterinary and Phytosanitary Surveillance Nov. 15.

Russia's wheat exports for the year were at 15.9 million mt through Nov. 2.

Turkey remained the largest buyer of wheat from Russia, having purchased 3.3 million mt as of Nov. 11 in MY 2021-22, followed by Egypt at 2.3 million mt and Kazakhstan at 900,000 mt.

S&P Global Platts Analytics projected Russian wheat exports at 36.5 million mt in MY 2021-22.

Russia had sold 38.5 million mt of wheat in MY 2020-21, according to data from the US Department of Agriculture.

The pace of Russian wheat exports has been declining since August as the taxes on exports have been consistently rising, traders said.

Wheat prices rises

Export prices of wheat rebounded after a slump, as demand from consuming countries, such as, Egypt, increased sharply after Russia decided to impose export quota on wheat for January to June.

S&P Global Platts assessed FOB Russia 12.5% protein wheat reached a record high of $335/mt Nov. 12, up $3.3 from Nov. 11.

Russia's wheat export prices previously hit an all-time high of $335/mt Nov. 3.

Concerns of tightening supply, amid rising demand from consuming countries, have also boosted prices, analysts said. Traders expect the prices to increase further over the next few months, due to the export quota.

The momentum of exports, however, could dull, according to traders, as Russia further raised its export taxes on wheat to $77.1/mt for the week of Nov. 17-23, up $7.2 from the previous week.

Russia introduced the floating rate in June, replacing the fixed rate mechanism of Eur50/mt ($58.78/mt). The duty is applied when the export price of wheat exceeds $200/mt and is calculated as 70% of the difference between the market price and that benchmark.

Harvest progress

The country's wheat harvest for MY 2021-22 has almost concluded. It harvested 78.1 million mt wheat as of Nov. 12, over 11% below the 87.9 million mt produced during the same period in the previous year, according to its agricultural ministry.

Around 46.7% of the wheat harvest was of fair quality, while around 12.5% was of inferior quality, according to the Russian Federal Service for Veterinary and Phytosanitary Surveillance.

Russia's wheat output is expected to decline in MY 2021-22, due to adverse weather conditions, particularly in the Urals and Volga regions.

Platts Analytics has projected Russia's wheat crop at 77.6 million mt in MY 2021-22. Russia harvested 85.9 million mt of wheat in MY 2020-21.