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USDA Grains: World Markets and Trade

13 January 2015

USDA Grains: World Markets and Trade - January 2015USDA Grains: World Markets and Trade - January 2015

USDA Grains: World Markets and Trade Reports

The Russian government recently announced a wheat export duty, effective February 1 through June 30. As the Russian ruble depreciated significantly over the last several months, wheat was exported at a record pace, and domestic prices rose sharply. The government attempted to slow exports by enforcing sanitary and phytosanitary standards, limiting railcar loadings, increasing the intervention price, and then implementing the duty. Exports are expected to be uncompetitive once the duty is in place.

Although Russia’s wheat export forecast is cut from a record 22 million tons to 20 million this month, it remains the second highest on record. More than 80 percent of the forecast was shipped by the end of 2014. Russia’s exports are expected to continue through January as exporters fulfill contracts before the duty takes effect.

The global impact on trade is expected to be minimal because other exporter supplies are abundant. Prices initially spiked with the announcement of the duty but have since subsided. Russia’s major markets are in the Middle East and North Africa. With competitive prices, plentiful supplies, and proximity to major markets, the EU and Ukraine are in the best position to take advantage, although other exporters may also benefit.

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