Russian wheat export prices defy currency moves, domestic price up 9%

Russian wheat export prices have managed to maintain their buoyancy despite the ruble’s value falling against the dollar, as sellers in the Russian domestic market adjusted their prices upwards, understanding exporters are still able to command similar prices on the global market.

The ruble has plummeted since late last week as the effects of a new round of US-backed sanctions started to bite and forced it to its lowest levels since December 2016.

The ruble dropped 8.7% between Friday night and Tuesday evening and had continued in freefall on Wednesday morning – dropping another 1.7% to 64.1661 against the dollar by 1100 in London.

Over the same period, the domestic price for 12.5% protein wheat has increased from RUB 10,600/mt CPT Novorossiysk on Friday to RUB 11,600/mt CPT by Tuesday evening, an increase of 9.4%.

“There has been no effect on the export market yet, but the price in the domestic market is changing every hour,” one trader told Agricensus.

Agricensus assessed $10 lower on Tuesday at $200/mt FOB Novorossiysk as buyers and sellers evacuated the market, only to return Wednesday with at least one deal concluded at $212/mt FOB for May shipment, with an unconfirmed rumour of a deal at $214/mt FOB.

Spot buyers are now bidding for handysize cargoes at $212/mt FOB panamax ports with sellers offering at $215/mt FOB.

New crop traded Wednesday at $199/mt FOB for September and at $202/mt FOB for October.