Russian export prices for wheat stabilised last week after seven weeks of fall, while domestic rouble prices continued their growth due to concerns among traders and farmers about potential export restrictions, analysts said on Monday.
Russian wheat with 12.5% protein content loaded from Black Sea ports was unchanged at $207 a tonne free on board (FOB) at the end of last week, SovEcon and IKAR, two leading agriculture consultancies in Moscow, said. Barley fell by $4 to $177 a tonne, SovEcon added.
Grain exports from Russia, the world's largest wheat exporter, are up in the last two week as the rouble fell sharply against the dollar amid the spread of coronavirus and weak oil prices. The Russian government has asked the agriculture ministry and other officials to prepare proposals on whether exports of any food, essential products or medicine should be limited. The proposals should be ready by March 25 and then be updated on a weekly basis.
It was not clear what the agriculture ministry was going to propose. Last week, it said there were sufficient stockpiles of agriculture and food products, including grain, in Russia, and no deficit was expected before the new crop arrives in summer.
"There are still a lot of speculations and rumours about potential restrictions, especially after the rouble weakened" sharply last week, SovEcon said.
"At this point, we have not heard about any plans to limit exports. In the near future we could some verbal interventions aimed at cooling down the market or slowing down the exports," it added. However, the risk of restrictions, from SovEcon's point of view, increased after domestic rouble prices rose sharply last week as some of farmers refused from previously agreed deals and brought advance payments back to sellers.
"However, unlike in previous cases, many owners of grain are willing to sell at relatively reasonable prices," as they need funds to pay for the current spring grain sowing and to clean up their storage before the new crop arrives in summer, SovEcon said.