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09/17/2023 01:08
Russian wheat supplies hit record levels, sending export prices to their lowest levels in three years. Bloomberg reports, citing sources, that in response to the current situation Russian authorities are considering introducing a minimum price for wheat and may refuse to issue export documents for supplies priced below this threshold.
Photo: openverse
Bloomberg analysts suggest Russian wheat faces limited competition in the global wheat supply market, and the combination of large inventories and an “unprecedented harvest” has led to oversupply, pushing prices lower.
Sources cited by Bloomberg indicate that the Russian government’s intention to set a minimum price for wheat exports is causing some traders to renegotiate the terms of their contracts or even cancel deals. The Grain Exporters Union said they were sticking to prices determined by “increased production costs.”
The USDA forecasts that global wheat supplies in the 2023-2024 season will decline by 3 million tons, to a total of 793 million tons, due to production cuts in Canada and Europe. According to Argitel, Russia’s share in world wheat trade is 23%and production is 87.5 million tons, well above the five-year average.
