In October 2020, world wheat prices hit a record high.
Since the beginning of the month, grain has risen in price by more than 10% on the CME Group's Chicago Mercantile Exchange and for the first time since December 2014 has been trading near $ 6.35 per bushel ($ 233 per ton).
On the Parisian stock exchange MATIF, quotes rose by 7.2% and rose above € 212 per ton.
The value became the highest since August 2018.
The sharp rise in exchange prices is largely due to the high demand for wheat from the importing states.
Managing partner of Agro & Food Communications agency Ilya Bereznyuk spoke about this in a conversation with RT.
According to him, countries are massively buying grain and stockpiling in case the coronavirus pandemic intensifies.
“In addition, we see the emergence of Pakistan on the market as a major buyer of wheat, although in previous years the country was actively selling grain.
A poor harvest in France, mediocre harvests in the US and Ukraine, as well as worsening forecasts for Argentina due to drought also affected prices, "Bereznyuk added.
It is noteworthy that the global growth in quotations was reflected in the cost of goods within Russia.
So, according to the latest data from the Sovekon company, from October 7 to 14, the average level of Russian prices for 3rd class wheat (the most common grain variety) increased by 2.73% and exceeded 15 thousand rubles per ton for the first time over the entire observation period. ...
Moreover, in the context of high dollar prices and the recent weakening of the ruble, Russian exporters have begun to actively purchase wheat on the domestic market for subsequent sale abroad.
Rush demand for grain from business has led to an additional increase in prices, said Mark Goikhman, chief analyst at TeleTrade Group.
“It is possible that in the short term, domestic wheat prices will continue to grow.
However, if a full-scale strengthening of the ruble begins, the rate of price growth may slow down, ”the expert added.
Note that in the current agricultural year (from July 1, 2020 to June 30, 2021), wheat production in Russia may grow by 12.7%, to 83 million tons - one of the highest rates for the entire period of observations.
The above value was recorded only in the 2017/18 agricultural year (about 85.2 million tons).
This is stated in a study by the US Department of Agriculture.
At the same time, according to the experts of the department, Russia is able to increase grain supplies abroad by more than 13% - up to 39 million tons.
According to this indicator, the country can noticeably bypass other large exporters, such as the United States (27 million tons), the European Union (25.5 million), Canada (25 million tons) and Ukraine (17.5 million).
“Last year, the EU exported more wheat than Russia.
However, this year the gross wheat harvest in the EU has decreased by more than 18 million tons.
Also, grain harvest in Ukraine decreased by 3.7 million tons.
That is, in total, we have about 16.5 million tons of wheat leaving the market.
At the same time, Russia has increased export supplies by 6 million tons.
All this also led to an increase in demand and, accordingly, prices for Russian grain, "Elena Tyurina, director of the analytical department of the Russian Grain Union (RGU), told RT.
As Ilya Bereznyuk noted, the record rise in wheat prices and Russia's global leadership in grain exports may have a positive effect on the country's budget.
So, due to the increased income of agricultural producers and an increase in foreign exchange earnings of exporters, the tax base will increase, which will make it possible to replenish the Russian treasury, the expert said.
© Alexey Sukhorukov / RIA Novosti
According to experts interviewed by RT, the observed rise in prices for wheat risks turning into an increase in prices for flour products in Russia.
Nevertheless, the growth in the cost of goods in pastry shops and on store shelves will be insignificant, experts are sure.
“As statistics show, retail prices for flour and baking goods have been growing in Russia since April, now this trend continues due to high demand, and retail prices for flour in the next six months will rise by another 2-5%,” she said in an interview with RT, Anna Bodrova, senior analyst at the Alpari information and analytical center.
Meanwhile, as noted by Ilya Bereznyuk, the share of wheat in the price of bread is only about 15%.
Against this background, according to Mark Goikhman's estimate, the growth in prices for bakery products will remain below inflation - within 3%.