The price of Russian %Wheat has surged to its highest level since last summer, driven by a decrease in supply, according to market data.
The situation with Russian wheat is likely to be exacerbated by an export quota set to be implemented starting on Feb. 15, which will limit Russia’s wheat exports for the remainder of the marketing year to approximately 10.6 million metric tons.
Russia is forecast to export only 2.1 million metric tons in January, down from 3.6 million a year earlier.
The diminishing supply has led Russian wheat prices to spike 12.5% higher to $243 U.S. per metric ton.
In addition to the upcoming export quota, Russian wheat crops have been negatively impacted by a drought last summer and early winter frosts this past autumn.
Plus, the Russian agriculture ministry has set a variable export tax for wheat that went into effect on Jan. 29.
As prices for Russian wheat rise, some buyers are seeking out alternatives in competing countries such as Argentina, Canada and Australia.
In the Black Sea region that is home to the world’s biggest wheat crops, supply remains constrained.
Ukraine has approximately 5.5 million metric tons of wheat left under its current export quota.
And traders in Romania have indicated that farmers in that country have already sold much of their wheat stock, resulting in a lack of available supply to help meet global demand.
The price of Ukrainian wheat is up 11.5% in recent days to $236 U.S. per metric ton, also its highest price since last June.
