Russia slows exports
Tight wheat supply pushes prices
RUSSIA appears to be taking measures to slow wheat exports as global supplies grow increasingly tight.
The Commonwealth Bank said Russian regulators were stepping up phytosanitary checks on Russian wheat exports, potentially closing ship-loading facilities for a period of time.
In August, The Weekly Times reported rumours from the Black Sea that Russia may work on slowing wheat exports, causing prices to rise to above the $400 a tonne mark.
Commonwealth Bank market analyst Tobin Gorey said any impediment on Russian wheat exports could have a flow-on effect for Australia.
“It’ll have an impact, because what it’ll do is push global prices higher, and that means the price of which Australia gets our export parity will be higher,” Mr Gorey said.
“That’s more a consideration at this stage for the western states of Australia over the east. It’s still conditional, if it happens. We suspect it will.”
Mr Gorey said Russian moves to slow exports was “to protect Brand Russia”.
“The market, though, does not seem to accept that slower exports is simply serendipity,” Mr Gorey said.
“Instead, the market is thinking that the missing Russia flow will instead come from the still well-supplied US.”
The Rabobank September commodities report showed global wheat stock availability was tightening, with deteriorating Australian stocks.
“The red hot pace of Russian exports puts short-term pressure on cash prices, but cannot be sustained,” the report said.
WHEAT PRICES: Russia has slowed wheat exports as global supplies get tighter, driving prices upwards.