Wheat market recovers after dip

A possible attack by the Russians creates uncertainty about grain deliveries from Europe's granary. Photo: Canva
A possible attack by the Russians creates uncertainty about grain deliveries from Europe's granary. Photo: Canva

The wheat market in Paris on Monday, January 24, again approached the level it ended at in 2021. In the afternoon, business ended at just above €275 per tonne. This means that the price difference of just before the turn of the year has almost disappeared.

In the second week of this year, price pressures took hold after the release of 2 new reports from the US Department of Agriculture. Paris also had to process price reductions with the first expiring contract falling to just above € 260 per tonne, as a result

Rising tensions between Russia and Ukraine

However, rising tensions between Russia and Ukraine put an end to falling prices in the past week. A possible attack by the Russians creates uncertainty about grain deliveries from Europe’s granary. And that, of course, has direct consequences for pricing.

An end to ever rising wheat prices

This is not noticeable in Russia itself. The export indicator prices, calculated in dollars, fell again slightly to $ 336.9 per tonne. The highest level was reached in mid-January at just above $340 per tonne. Converted into euros, this indication price has dropped by about € 4 to € 297 per tonne. And a small difference, but this has put an end to the ever rising prices for the time being.

Russian wheat exports will continue

Despite export duties of almost $100 per tonne, wheat exports from Russia will continue. The quantities are smaller than a year ago, but almost 23 million tonnes have already been delivered to destinations outside Russia. Turkey is by far the most important buyer of Russian grain this season. And Kazakhstan also buys more wheat than a year ago. Sales to Egypt are more than 40% lower, but with 3.6 million tonnes, the Egyptians are still a major customer.

Political tensions

Another important buyer in the wheat market is Algeria. This country is currently keeping France out of market as much as possible due to political tensions between the 2 countries. Other exporters such as Germany are benefiting from this, because the Algerians still have a great need for wheat.

Ramaker


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