Russian wheat exports, a critical component of the global grain supply, are projected to decrease significantly in December 2024, with estimates ranging between 3.3 million and 3.5 million tons. This marks a 17% month-on-month drop from November 2024, when 4.1 million tons were shipped. Experts from the analytical center SovEcon attribute this reduction to a combination of factors, including lower export margins and a higher export duty.
The Impact of Rising Export Duties
One of the most significant factors contributing to this decline is the recent increase in export duties. As of December 2024, the wheat export duty stands at 4,872 RUB per ton (approximately $47), up from 2,569.2 RUB per ton (around $26) just one month prior. This rise in tariffs has led to a negative export margin, which had previously been around $10 per ton in November but has now turned negative.
This increase in duties has dampened the incentives for exporters, slowing the pace of wheat sales. On December 9, 2024, the volume of wheat contracts signed was just 0.8 million tons, the lowest since April 2024. As a result, the overall export pace has slowed, reflecting the growing financial strain faced by exporters.
Weather Challenges and Regional Disruptions
In addition to the financial factors, weather conditions are playing a critical role in the slowdown of exports. A storm warning has been issued for the Krasnodar region, a key wheat-producing area in Russia. This could lead to delays in shipments, further exacerbating the export reduction.
Comparison with Previous Years
In December 2023, Russia exported 3.2 million tons of wheat, slightly below the average for the past five years, which stands at 3.5 million tons. This historical context highlights the ongoing volatility in wheat export volumes. SovEcon forecasts the total wheat export for the 2024/2025 season to reach 44.1 million tons, a slight decrease compared to previous seasons due to the combination of reduced export margins and external factors.
