Prices in the grain market have been cautiously on the rise over the past trading session. Concerns about disappointing grain exports from the Black Sea region once again prevailed, according to various analysts. But the export of grain from Russia has certainly not stopped.
The wheat quotation on the Matif closed yesterday at €0,75 slightly higher at €364,50 per tonne. The contracts for the new harvest rose faster. The September contract closed at €342,25 per tonne, a plus of €6,50. The May 2023 contract comes in at €330 per tonne, €5 higher than the closing price a day earlier. On the CBoT, the wheat price rose 3,7% to $1049,50 per bushel (approximately €353 per tonne). Corn rose to $760,50 per bushel (about €274 per ton). That is the highest price in more than three weeks.
Possible new sanctions against Russia are a major cause of the increases in the grain market. The US and allies are considering additional measures against Russia after the images of civilian deaths in the suburbs around Kiev. Russia is heading for the worst crisis since the dissolution of the Soviet Union and its consequences extend beyond Russia alone. The Kremlin warned yesterday about the consequences of the sanctions on a global scale. According to the Kremlin, high energy prices and the limited availability of fertilizers are causing Western countries to turn on the money press to buy up stocks. This leads to shortages in the poorer countries of the world. "Under the current circumstances, a shortage of fertilizer on the world market is inevitable," Putin said at a meeting on the development of food production. "We need to be more careful with food supplies abroad and especially keep a close eye on exports to countries that are hostile to us."
Egypt continues to import Russian wheat
Russia still manages to export grain. Reuters news agency reports that Egypt imported 479.165 tons of wheat from Russia in March. That is 24% more than in the same month last year. For Egyptian imports from Ukraine, the counter in March stands at 124.500 tons, 42% less than in March 2021. The trade in foodstuffs has been kept out of the sanctions, but several Egyptian traders indicate to Reuters that the import is still going to be difficult. Banks are reluctant to finance grain from Russia. Some of the wheat delivered in March had already been paid for before the Russian invasion. Importers are trying to find a safe way to pay for wheat that has not yet been paid for.
Egyptian traders are now also doing business with less common suppliers. For example, grain is imported from France, Brazil, Lithuania and Bulgaria. Even from Germany - which has not supplied grain to Egypt for several years - a shipment is expected. That trend is likely to continue in the coming season. The European Commission announced yesterday that it expects EU wheat exports to increase significantly in the 2022/2023 season. On the other hand, maize imports are falling. The war in Ukraine will cause significant shifts in the grain market, according to the Commission.