Russia Imposes Wheat Export Duty—But Exports Still Second Highest On Record

The Russian government recently announced a wheat export duty, effective February 1 through June 30. As the Russian ruble depreciated significantly over the last several months, wheat was exported at a record pace, and domestic prices rose sharply. The government attempted to slow exports by enforcing sanitary and phytosanitary standards, limiting railcar loadings, increasing the intervention price, and then implementing the duty. Exports are expected to be uncompetitive once the duty is in place.

Although Russia’s wheat export forecast is cut from a record 22 million tons to 20 million this month, it remains the second highest on record. More than 80 percent of the forecast was shipped by the end of 2014. Russia’s exports are expected to continue through January as exporters fulfill contracts before the duty takes effect.

The global impact on trade is expected to be minimal because other exporter supplies are abundant. Prices initially spiked with the announcement of the duty but have since subsided. Russia’s major markets are in the Middle East and North Africa. With competitive prices, plentiful supplies, and proximity to major markets, the EU and Ukraine are in the best position to take advantage, although other exporters may also benefit.



Global production for 2014/15 is projected at a new record. Global trade is up slightly as higher projected imports, primarily in the EU and Iran, more than offset cuts in China and Ethiopia. Russian exports are slashed as a result of an export duty that takes effect February 1. Exports for EU and Ukraine are raised as both are in the best position to benefit from Russia’s declining presence in the market. U.S. trade is unchanged, but the season-average farm price is raised slightly.


Export prices for all wheat classes dropped in December. Hard Red Spring (HRS) plunged $62 to $307/ton because of improved rail logistics and falling freight costs. The export quote is the lowest since July 2010. Hard Red Winter (HRW) prices slid $14 to $274/ton. Soft Red Winter (SRW) fell $8 to $263/ton, and Soft White Winter (SWW) tumbled $26 to $261/ton for reasons similar to those of HRS.


Selected Exporters

• Canada is up 500,000 tons to 23.5 million on the pace to date and strong global demand for durum.

• EU is boosted 1.0 million tons to 30.0 million on reduced competition from Russia.

• Iran is raised 500,000 tons to 1.2 million on reports of greater flour exports to neighboring countries.

• Russia is cut 2.0 million tons to 20.0 million because an export duty that begins February 1 is expected to curtail shipments.

• Ukraine is raised 700,000 tons to 11.0 million with new opportunities in the EU due to the preferential duty-free quota and reduced competition from Russia in other markets.

Selected Importers

• EU is up 500,000 tons to 5.5 million on expectations that Ukraine will export feed-quality wheat to southern EU countries.

• Iran is boosted 500,000 tons to 6.5 million on continued strong purchases and recent deliveries.



Global production for 2014/15 is up slightly. Global trade is higher due to greater demand in China and stronger exports for Thailand, Burma, and Paraguay. Global consumption is revised higher, while stocks are marginally lower. U.S. production is virtually unchanged, and imports are raised.

Thai Rice Exports Climb to a New High

Thailand rice exports are forecast to reach a new high in 2014/15. The government is actively seeking export opportunities to reduce the massive stocks, accumulated under the discontinued paddy pledging scheme, which pushed down prices. Though a surge in exports in 2013/14 helped draw down stocks, exportable supplies remain large with the harvest of the main crop. Government-led sales are likely to drive Thai exports for the foreseeable future.


• Bangladesh’s imports are up 150,000 tons to 850,000 on greater imports from India.

• Burma’s exports are up 100,000 tons to 1.6 million on trade to date.

• India’s exports are up 500,000 tons to 10.5 million on larger shipments to neighboring countries and Saudi Arabia.

• Paraguay’s exports are up 100,000 tons to 350,000 on stronger shipments to other South American countries.

• Saudi Arabia’s imports are up 125,000 tons to 1.5 million on larger shipments from India.

• Sri Lanka’s imports are up 130,000 tons to 300,000 on larger purchases from India.

• U.S. exports are cut 100,000 tons to 3.0 million on trade to date.


• Burma’s exports are boosted 150,000 tons to 1.6 million on expected strong shipments to the EU and countries in Asia.

• China’s imports are up 300,000 tons to a record 4.3 million to reflect recent agreements with Burma and Thailand.

• Paraguay’s exports are up 140,000 tons to a record 400,000 on a larger crop.

• Thailand’s exports are up 300,000 tons to a record 11.3 million as the government actively seeks market opportunities to reduce stocks.



Barely remaining a record, world corn production is lowered as smaller U.S. production more than offsets larger crops in India and the EU. Imports are slightly higher on a larger forecast for Canada (adjustments in Turkey and the EU are offsetting). The U.S. season-average farm prices for both corn and sorghum are raised this month with sorghum now above corn for the first time since 2006/07.


Since the release of the December WASDE report, U.S. corn quotes rose, peaking at $191/ton and then fell to $180/ton by early January as prices continued to be pressured by large supplies and a strong dollar. As old-crop exportable supplies tighten, Argentine quotes remain $10 above U.S. Meanwhile, Black Sea rose to end about $9 above U.S. prices. Brazilian quotes were no longer available as of mid-December, notably earlier than in the previous few years when they ceased in February or as late as April.


Selected Exporters

• Australian barley is raised 200,000 tons to 4.5 million on larger-than-expected carryin and strong global demand.

• U.S. sorghum is raised 1.0 million tons to 6.8 million, the highest level in more than 2 decades, on steady purchases by China.

Selected Importers

• EU corn is boosted 1.0 million tons to 7.0 million on the pace of import licenses and greater wheat exports.

• Turkish corn is slashed 1.0 million tons to 1.5 million due to the lower-than-expected pace of early-season shipments and imports of non-grain feed ingredients.

• Canadian corn is boosted 300,000 tons to 1.0 million on strong early-season shipments from the United States.

• Iranian and Tunisian barley are raised 200,000 tons each to 1.2 million and 300,000, respectively, on recent purchases.

• Chinese sorghum is raised 1.2 million tons to 6.2 million on a continued strong pace of purchases and shipments.

• Japanese sorghum is cut 200,000 tons to 1.0 million due to weak early-season shipments and purchases