Russian Wheat Prices Surge - January, 31,2025

• Tightening supply and slower exports drive Russian wheat prices higher.
• Russia's wheat export quota set at 10.6 million mt for mid-February to June 30.
• Falling freight rates partially offset rising FOB wheat prices.
• Buyers shift focus to competitive alternatives from Argentina and Australia.

Russian Wheat Prices Hit Multi-Month Highs

Russian wheat prices have climbed to their highest levels since June 2024, fueled by tightening supply and a slowdown in export volumes. The upcoming export quota of 10.6 million mt, effective from February 15 through June 30, is expected to further restrict supply, compared to last year’s 28 million mt cap for all grains.Export Slowdown:

• January exports forecast at 2.1 million mt, down from 3.6 million mt a year ago.
• February exports projected at 2.5 million mt, compared to 4.4 million mt in 2024.

Platts assessed FOB Russian wheat 12.5% protein at $243/mt (loading Feb. 15 – Mar. 15), marking the highest level since June, when frost and drought reduced production to 81.6 million mt—down from 90.5 million mt a year earlier.With lower production, Russian wheat exports for the 2024/25 marketing year (June-July) are estimated at 45 million mt, a sharp decline from 54.7 million mt last season.

Impact of Higher Export Taxes and Freight Market Trends

Russia has increased its variable wheat export tax to Rb4,430/mt (effective Jan. 29), up significantly from Rb2,845/mt in June. This policy shift, combined with tightening supply, has made Russian wheat less competitive in the global market.Despite higher FOB values, freight rates are falling, helping mitigate the rise in overall CIF costs.

• Freight rates have dropped by 25-30%
• Lower shipping costs provide some relief to buyers but do not fully offset FOB price increases.

Global Buyers Look for Alternatives

As Russian wheat prices rise, major importers are delaying purchases, waiting for potential price corrections. Some buyers are shifting demand towards Argentina and Australia, where wheat remains more competitively priced.

Black Sea Region Wheat Supply Update

• Ukraine: Remaining wheat under export quota – 5.5 million mt out of 16.2 million mt cap.
• Romania & Bulgaria: Available wheat stocks 3.5-4 million mt, with most farmer-held supplies already sold before the new year.

Price Updates:

• Ukraine wheat 11.5%: $236/mt (highest since June).
• FOB CVB 12.5% & 11.5%: $247.50/mt and $244.50/mt, highest levels since December and June, respectively.

Market Outlook

With Russian wheat prices maintaining an upward trend, global buyers may continue seeking alternative sources. If freight rates continue to decline, CIF costs may stabilize, but supply-side constraints and policy interventions will likely keep volatility high in the near term.

Stay tuned for more updates from GrainFuel Nexus on the latest developments in global grain markets.

GrainFuel Nexus | Expert Commodity Intelligence & Strategic Advisory

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