Currently, grain prices on the world market are at their lowest since 2020. This is a negative trend for manufacturers and exporters.
According to the latest data, world wheat prices fell further last week.
For example, the exchange price of Russian wheat with protein was about $218-224 per ton, notes the SovEcon analytical center.
At the same time, it cannot be said that only Russian wheat is becoming cheaper; this is a general trend, experts say.
For example, Elena Tyurina, Director of the Analytical Department of the Russian Grain Union, emphasizes that over the year, Russian wheat fell in price by 25%, French by 32%, and American by 24%.
As a result, Russian grain is now traded on the world market with virtually no discount and is completely competitive in price.
At the same time, despite the fall in prices, the volume of concluded contracts is growing.
For example, as of February 19, this volume amounted to 2.8 million tons, while a month ago it was 1.9 million tons.
Experts believe, however, that the current price environment, not to mention a further drop in prices, may lead to the conclusion of new contracts almost completely stopping. This opinion is shared, in particular, by the general director of the Institute for Agricultural Market Studies, Dmitry Rylko.
However, export demand is now gradually recovering. For example, buyers from Egypt, Indonesia and a number of other countries are activated.
Whether there will be a recovery in grain prices in the near future is a difficult question. Independent grain market expert Alexander Korbut, for example, does not see any reasons for this in the foreseeable future.
All this could lead to such consequences as strengthening domestic grain prices against the backdrop of weakening global prices, analysts emphasize.
In other words, grain will begin to rise in price on the Russian market, which may lead to higher prices for final products.
At present there is no reason to think that the problem will be resolved quickly.
“This problem will negatively affect the pace of exports. Domestic prices tend to decline, but not at the same rate as on the world market.
This means that exporters will face the difficult task of purchasing grain to fulfill their contracts.
You also need to keep in mind that at the beginning of February they had large reserves of relatively expensive (compared to the world price) grain.
There is nothing good in this, and they will also have serious problems,” says Vladimir Petrichenko, general director of the analytical company ProZerno.
