Black Sea Supply Shock Drives Up Russian Wheat Export Prices
Russian wheat export prices rose last week due to a shortage in supply caused by restrictions in the Azov-Black Sea basin. Analysts point out that global prices have increased, with world FOB prices rising sharply amid extremely limited supply from Russia and Ukraine. Andrey Sizov, head of SovEcon consultancy, said 'We believe the market is finally starting to seriously price in the Black Sea supply shock'. Wheat exports from Russia may remain at their lowest level since 2010 for the second month running.
The bulk of shipments via ports in the Azov-Black Sea basin were halted throughout last week due to attacks on vessels and damage to terminals. Export prices for wheat with a 12.5% protein content in the Baltic region, where shipments are being redirected, were at $263 per metric ton FOB Vysotsk by the end of last week.
IKAR estimated that Russia had been able to export around 1.9 million tons of wheat in August, with SovEcon and Rusagrotrans raising their estimates to 2.0 million tons. SovEcon provided its first estimate for wheat exports in September: 1.8-2.3 million tons, compared with 4.8 million tons a year earlier.