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Since the end of August, wheat prices have returned to their pre-war level in Ukraine and are currently around 330 euros per tonne on the main European market Euronext. In addition to Ukrainian cereal exports, Russia’s gradual return to the market also weighed on the fall in prices. Russian wheat exports could accelerate in the coming months with very competitive prices.
This competitiveness of Russian wheat is linked first of all to the large quantities which are still to be sold. The harvest is indeed coming to an end in Russia with record production, up more than 20% compared to last year. Between July and August, Russia exported very little, 32% less than the previous season, so a large volume should arrive on the market in the coming months. In total, Russian exports are expected to reach 42 million tonnes for the 2022-2023 campaign.
Another factor that justifies its competitive price: according to Marc Zribi of FranceAgriMer, there may be a desire on the part of Russia to cut prices to compensate for the additional freight and logistics costs for exports. In this context, everything suggests that wheat prices could fall further, especially as the market waits from November and December for the arrival of the harvests from Argentina and Australia.
The latter country should also reap an excellent harvest of 33 million tonnes of wheat. But if the volumes are substantial, there is still great geopolitical uncertainty linked to the Russian-Ukrainian conflict. All analysts agree on the fact that the price of wheat will evolve according to the situation in Ukraine, but also to the state of traffic on the Black Sea. This region of the world plays a central role in the balance of the world cereals market.