Market Morsel: Increased Russian wheat exports expected
Market Morsel
SovEcon ups Russian 20/21 wheat export forecast on expectations of bigger domestic supply and current fast pace of shipments
SovEcon, a leading Black Sea agricultural markets research firm, upped its wheat exports forecast by 1.6 MMT to 37.9 MMT in 2020/21 (July/June).
The increase in the wheat exports forecast is due to the high current export pace ahead of taxes. January 2021 exports are estimated at 3.3 MMT (+57% YOY), a record volume for the month. The first wheat tax (25 EUR/MT) kicks in on February 15.
An additional factor is the expectation of more active exports in the last months of the season, based on the scenario that the authorities will announce a floating tax from July 2021. This is likely to increase the supply in the current season as farmers will lose the incentive to store wheat till the new season.
In 2019/20 Russia, the top world wheat exporter shipped abroad 34.9 MMT. In November 2020, before the tax news, SovEcon estimated 20/21 exports at 40.8 MMT.
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