Rising Ruble Dents Russian Wheat-Export Outlook Amid Global Glut

  • Ikar on Tuesday joins SovEcon in reducing export estimate
  • Russian currency has gained 16 percent so far this year

Russia will probably export less wheat this season than expected before as a stronger ruble makes it harder to find customers for the grain.

Shipments from the world’s biggest supplier will be 29.5 million metric tons, down 1.6 percent from a previous estimate, Moscow-based Institute for Agricultural Market Studies said Tuesday. SovEcon, another consultant in Moscow, reduced its outlook 1.3 percent to 30 million tons last week.

Russia’s bumper crop boosted wheat inventories to a record for the nation’s port-Soviet history by Oct. 1, according to SovEcon. That’s adding to the global glut from large harvests around the world that have pushed benchmark prices in Chicago to near a 10-year low.

“The trend isn’t very good,” said Dmitry Rylko, director general of IKAR, as the institute is known. “The ruble is getting stronger while the external market is difficult, with ample supply.”

The ruble’s rebound has slowed international sales so far this season by making the grain more expensive for overseas buyers. The currency has gained 19 percent against the dollar this year, driven by an increase in the oil price.

Exports also suffered when Egypt, a major buyer of Black Sea grain, briefly halted purchases earlier this year amid a dispute with traders.

The coming winter may be harsher than last, which was the warmest on record, Rylko said. That has the potential to suspend navigation in Russia’s shallow Azov Sea ports in a change from last season, which would interrupt some grain exports, he said.

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