Russia announced additional restrictions on wheat exports, even as its wheat sales have slumped in the current marketing year. The country’s latest move could further squeeze already tight global wheat supplies.
Russia, the world’s biggest wheat exporter, said it will impose a wheat export quota of 8 million tonnes for the period from Feb. 15 to the end of June. The quota is in addition to Russia’s floating-rate wheat export tax enacted last June that has curbed year-over-year exports of the grain by about 30% since the July start to this marketing year.
The export quota, intended to quell Russia’s domestic food price inflation, could force wheat importers to increasingly seek out supplies from other major producers, including the US and Australia. But with ending wheat stocks globally at their lowest level in 14 years, a shift in international trade flows could continue to exert upward pressure on wheat prices, raising input costs for a host of food manufacturers, from bakeries to breakfast cereal makers.
Since July 1, FOB export prices are up 38% for milling wheat from the Black Sea region, which includes Russia and Ukraine. Russia’s wheat export tax compounds FOB price gains, helping to explain the country’s sharp drop in wheat exports. By comparison, FOB export prices are up 30% for hard red winter wheat shipped from US Gulf ports.
Russia’s current winter wheat crop looks set to outpace last year’s weak harvest, according to Gro’s Russia Winter Wheat Yield Forecast Model. NDVI, a satellite-based measure of vegetative health, is at its highest level in at least 20 years, according to Gro’s Climate Risk Navigator for Agriculture. To learn more about the Climate Risk Navigator application, which can highlight growing conditions for specific regions and crops, contact email@example.com.
Wheat crop prospects are mixed elsewhere. The US winter wheat crop, now heading into dormancy, faces unseasonably warm and dry weather in the southern Plains. Gro’s US Hard Red Winter Wheat Yield Forecast Model since early December has been projecting yields well below 2021’s bumper crop.
Australia’s high-protein wheat crop is in a better position to replenish global supplies. Still, Gro’s Australia Wheat Yield Forecast Model continues to signal that production will be lower than last year and well below government estimates, as Gro wrote about here.