The Ministry of Agriculture supported the idea of developing direct grain sales abroad, bypassing foreign exporters and traders.
The Union of Grain Exporters reports that the Ministry of Agriculture agrees with the idea of selling Russian grain abroad directly, bypassing foreign companies.
The point is that Russian exporters themselves should be engaged in deliveries, and not provide their products to foreign legal entities that have won tenders. The reason is that involving foreign companies leads to them becoming resellers and raising the price several times in the chain «supplier-end consumer».
As a result, Russian wheat becomes less competitive in price, and in addition, Russian producers have to resort to dumping in order to sell their products abroad.
The Ministry of Agriculture is currently concerned about this situation. There are rumors that the department has already recommended that market participants refrain from selling wheat abroad at a price of less than $250 per ton.
Apparently, this is just a verbal warning for now, but if companies do not want to follow this advice, then enforcement measures cannot be ruled out. For example, the Ministry of Agriculture may revise grain export quotas for the end of this year downwards if exports at dumping prices continue.
In general, Russian grain is in demand today.
For example, in recent weeks, Saudi Arabia has bought about 300 thousand tons of wheat, and Algeria — 500 thousand tons. Currently, Bangladesh is also holding a procurement tender, as a result of which a large purchase is very likely.
This leads to the fact that Russian wheat has risen in price by about $ 6 in a week and is now trading at $ 232 per ton.
However, this is still significantly less than the quotes for foreign wheat.
For example, French wheat now costs about $ 253 per ton, Romanian — $ 243, American — $ 270.
Despite the fact that products from the Russian Federation significantly win in terms of price attractiveness against this background, the Ministry of Agriculture sees a problem in such prices, since farmers are not receiving enough funds.
Meanwhile, the new 2024-2025 season has just begun, but is already facing problems.
For example, in a number of regions of the Russian Federation there is no moisture in the soil, which leads to delays in sowing winter crops. For this reason, it is possible that next year’s harvest will be less than expected.
The world market can already factor this into prices, which may also be a factor stimulating the growth of prices for Russian grain today.
