Bloomberg: Russia Switches to High-Quality Wheat for Exports as Prices Gain

08.02.2017

Published by Anatoly Medetsky, February 7, 2017

  • Share of high-protein wheat in exports rose to 95 percent
  • UkrAgroConsult expects Russian shipments to accelerate

Russia boosted the quality of its wheat exports as farmers increased offers of better grain, according to a market consultant.

In January, wheat with protein content of 12.5 percent or more comprised 95 percent of overseas shipments of the cereal, Kiev-based UkrAgroConsult said in a report Tuesday. That’s up from about 40 percent at the start of the season, according to the consultant.

Russia, the biggest wheat exporter, last year gathered more low-protein grain than usual, an effect of a large amount of rain before and during harvest. Exports of that variety rose as farmers preferred to sell the cheaper grain first as bumper harvests in many nations sent prices to a decade low in August.

“There was a lack of high-quality wheat and that has gradually made its prices stronger,” Marina Sych, an analyst at UkrAgroConsult, said by phone. “Its offer on the domestic market has now increased.”

Prices for Russian wheat at Black Sea ports held at an eight-month high last week, according to data compiled by the Moscow-based Institute for Agricultural Market Studies, or Ikar.

High-quality wheat accounting for 95 percent of all exports of the cereal is normal for Russia, Sych said. It’s the type of wheat that Russia sells to Egypt, the world’s biggest buyer, and Turkey, she said.

Egypt has accelerated purchases from Russia, buying the most in at least four years at the latest tender on Jan. 26. UkrAgroConsult expects the pace of Russian exports to quicken as farmers sell out their inventories of high-quality wheat, Sych said.

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