Russia's 2021-22 wheat exports fall 21% on year, prices decline

Russia exported 23.6 million mt wheat between July 1 and Jan. 27 during the marketing year 2021-22 (July-June), down 21% year on year, while export prices declined $2 week on week, data from the Russian Federal Service for Veterinary and Phytosanitary Surveillance showed Jan. 31.

Turkey purchased 4.6 million mt of Russian wheat during the year and was the top buyer as of Jan. 27, followed by Egypt at 3.7 million mt and Kazakhstan at 1.6 million mt.

S&P Global Platts Analytics has estimated Russian MY 2021-22 wheat exports at 36.5 million mt.

Russia, the world's largest wheat exporter, sold 38.5 million mt of wheat in MY 2020-21, according to data from the US Department of Agriculture.

The country's wheat harvest was at 79.1 million mt in MY 2021-22 as of Dec. 30, compared with 88.1 million mt, a year ago, according to the agricultural ministry.

Russia's wheat output is expected to fall in MY 2021-22, due to adverse weather conditions, particularly dry and warm summers.

Platts Analytics has projected Russia's wheat crop at 77.6 million mt in MY 2021-22.

Export prices decline

Export prices of Russian wheat fell $11 over the past month, as the government's repeated interventions and escalating tension with Ukraine weighed on the prices.

Russia introduced new export tax mechanisms last month, setting an export quota on wheat at 8 million mt over Feb. 15-June 30.

The export tax will have a higher multiplier if wheat prices reach $375/mt, according to the new regulations. The tariff could increase if prices breach $400/mt.

Russia introduced a variable export tax June 2 to keep domestic inflation in check.

The export tax is calculated as 70% of the difference between the average export prices on an FOB basis during the 60 days preceding the day of calculation and $200.

The Russian government Jan. 28 reduced the variable export tax for the Feb. 2-8 week to $93.90/mt, from $95.80/mt a week ago, as export prices fell.

S&P Global Platts assessed FOB Russia 12.5% protein wheat down $3 day on day at $327/mt Jan. 31.

Prices may see some volatility, due to the ongoing border tension with Ukraine, possibly hurting wheat demand from the Black Sea region, traders said.