A proposal made by the Russian agriculture ministry last week to limit Russian grain exports to 7 million tons from April through June because of the coronavirus pandemic was backed by the country’s Economy Ministry, it said on Monday, according to Reuters.
While the proposal is unlikely to have much initial impact, as 7 million tons is roughly what Russia was expected to export in the last quarter of the 2019/20 season, the move has raised expectations tougher steps may follow, traders said.
“We agreed on such a draft resolution on March 27 as part of our work against the coronavirus,” the economy ministry said in response to a request for comment. Russia exported 25.2 million tons of wheat, rye, barley and corn in the first six months of the 2019/20 season and shipped a further 7.2 million tons between the start of 2020 and March 26.
Russian wheat export prices jumped alongside European benchmarks last week while domestic prices were tempered by higher supply from farmers selling to raise cash for spring sowing, analysts said on Monday. Russian wheat with 12.5% protein content loaded from Black Sea ports and for the nearest delivery jumped by $10 to $217 a ton free on board (FOB) at the end of last week, SovEcon said.
Government approval of the newly-proposed export quota may come quickly, SovEcon said, adding that the limit is reasonable and probably will not be reached. However, Russia could take other steps to slow exports later because domestic prices are still rising.
“Buyers are putting more pressure on authorities asking them to regulate the market,” SovEcon said.
