The analytical center "SovEcon" has lowered the forecast for Russian wheat exports for the 2024/25 season by 1.5 million tonnes, reaching 40.7 million tonnes. In the previous season, 52.4 million tonnes were exported, while the average over the last five years was 40.9 million tonnes. From the beginning of the year until February, 32.6 million tonnes of wheat were shipped to foreign markets, slightly lower than the previous year (33.8 million tonnes). In February, 1.9 million tonnes of wheat were exported, also slightly lower than a year ago (2.3 million tonnes) and below the average for February over the last five years (4.1 million tonnes). However, the export forecast for the new season has been increased from 38.9 million tonnes to 39.1 million tonnes due to increased incoming stocks.
Wheat exports continue to slow down due to low profitability. Exporters' margins turned negative from the end of last year, unlike the $5-10/ton in autumn, analysts note. In addition, low wheat supply is slowing down export pace: as of March 1, wheat stocks amounted to 11.6 million tonnes, which is 34% lower than a year ago and 9% lower than the average over the last five years.
Moreover, the rapid strengthening of the ruble creates problems for exporters. In the past two months, its exchange rate has significantly increased. This affects export duties, albeit with some delay, which negatively impacts exporters, analysts believe. The duty rate from March 26 to April 1 will be 1846.7 rubles per ton, compared to 2403 rubles per ton the previous week.
However, the new forecast implies an acceleration of exports after a long period of slow shipments in recent months, caused by rising export prices, importer activity, and a possible weakening of the ruble. "Modest export volumes from Russia in the remaining months of the season, against the backdrop of increased demand from importers and moderate indicators of the new harvest, may support prices," – analysts believe.