Russia and Ukraine. Transparency of regulation, equal terms and predictability are the conditions of essential importance to all market participants

28.08.2018

Will the Black Sea countries restrict wheat exports? Russia and Ukraine may account for a combined some 28% of global wheat exports in the 2018/19 season. This is the main reason why rumors about possible restriction of exports from these countries triggered serious world wheat price surges in August.

CBOT wheat quotation and rumors about export restriction

The first was Ukraine. Information that Ukraine may restrict milling wheat exports once they reach 8 MMT, turned out to be half true. A memorandum was signed between the government and traders that 16 MMT of wheat, including 8 MMT of milling wheat (1st-5th classes), could be exported without detriment to the domestic market.

In mid-August, rumors that Russia may impose duties once shipments of wheat (or, according to various sources, wheat and barley) reach certain volume, stirred up the market again. The official position voiced thereafter assumes no restrictive measures or duties, but with the words “FOR NOW.”

Undoubtedly, both countries have grounds for controlling actual grain shipments. During the incomplete first two months of the season, wheat was shipped from Ukraine and Russia at an extremely fast pace despite lower export availabilities, report UkrAgroConsult’s analysts.

What does it mean for the market?

Full version of the article is available to subscribers for weekly market report “Black Sea Grain” by UkrAgroConsult.

 

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