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Russia's MY 2021-2022 wheat exports slip 9% on year to 12.2 mil mt

Highlights

Raises wheat export tax by $4.50/mt for Oct. 6-12

Wheat harvest falls 13% on year to 75.1 mil mt

Analysts see 2022 winter wheat sowing fall on dry weather

Russia's wheat exports fell 9% on the year to 12.2 million mt as of Sept. 30 for the marketing year 2021-22 (July-June), the Russian Federal Service for Veterinary and Phytosanitary Surveillance said Oct. 5.

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In the week to Sept. 23, Russia's cumulative wheat exports stood at 11.1 million mt for MY 2021-22.

Turkey, that has bought 2.8 million mt of wheat so far in MY 2021-22, remained the largest buyer of Russian wheat, followed by Egypt and Saudi Arabia. Egypt purchased 1.5 million mt, while Saudi Arabia imported 600,000 mt of Russian wheat.

Russia's wheat exports are estimated to be lower during the current marketing year. S&P Global Platts Analytics has reduced its estimate for Russian wheat exports in MY 2021-22 to 36.5 million mt from its previous projection of 38.6 million mt.

According to data from the US Department of Agriculture, Russia shipped 38.5 million mt of wheat In MY 2020-21.

The pace of Russian wheat exports has been slowing over the past few weeks because of rising export taxes on wheat shipments, traders said.

In August, the rapid growth in global wheat prices spurred an increase in the wheat export tax, which weighed on exports.

The wheat tax was fixed at $57.80/mt for the week of Oct. 6-12, increasing $4.50 from the previous week, the Russian agricultural ministry said.

Russia introduced the floating rate in June, replacing the fixed rate 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.

S&P Global Platts assessed FOB Russia 12.5% protein wheat at $307.75/mt on Oct. 5, up 25 cents from Oct. 4.

Harvest progress

As of Oct. 5, Russia harvested 75.1 million mt of wheat, more than 13% below the 86.4 million mt harvested during the same period last year, according to the agricultural ministry.

Russia's wheat output is seen declining in MY 2021-22 due to dry weather conditions in the Urals and Volga, with the Urals possibly harvesting its smallest crop since 2012 and Volga since 2014.

Platts Analytics had cut its MY 2021-22 projection for Russia's wheat crop to 77.6 million mt from 80.2 million mt. It had harvested 85.9 million mt of wheat in MY 2020-21.

In its latest World Agricultural Supply and Demand Estimates report published Sept. 10, the USDA estimated Russia's MY 2021-22 wheat output at 72.5 million mt.

Moreover, analysts said the dry conditions in major growing regions may also dim the prospects of the wheat crop in the next marketing year.

They added that this autumn, Russia's plantation winter wheat may be lower due to the dry weather.

Winter wheat, sown in autumn and threshed in summer, typically accounts for 70% of Russia's wheat crop, bringing a higher yield than the spring planted crop and is less vulnerable to adverse weather.