Russian wheat origination costs surge as supply concerns grow

16.01.2019

Russian wheat origination costs are rocketing as supply tightness concerns heighten.

The growing shortage of wheat to export, at or near main ports, has left silos dry and pushed sellers to peruse remote regions in order to originate, sources said.

Origination costs for 12.5% protein wheat are now heard as high as $248-$250/mt, according to sources, while 11.5% protein wheat, Egypt's preferred protein grade, is available for $240/mt.

Market participants are now searching Volga and other Central regions as well as Siberia to originate.

Parcels coming from Siberia are said to take three weeks due to the "long distance," a source said, amid a shortage of railwagons.

Furthermore, the sheer time taken to deliver the cargo means it is difficult to hire a railwagon as owners prefer quick trips.

For example, origination from wheat sources near ports can take up to a week to deliver.

By hiring out cargoes for such a period allows owners to put their wagon back on the market more quickly.


spglobal.com

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