The decline in wheat prices has continued towards 240 euros per ton, thanks to a record wheat harvest in Russia (around 100 million tons) and strong recent export dynamics.
In doing so, traders are ignoring the increased risk of a breakdown in the grain trade agreement between Russia and Ukraine. The Russian side, namely, continues to condition the extension of the agreement after May 18 on the release of its agricultural exports from ‘Western’ sanctions. If the West does not meet the demands, maritime exports of Ukrainian agricultural products could be significantly hampered, falling to just eight to ten million tons. After all, it would then become questionable to what extent grain transporters are still willing and at what price to guarantee transport given the risk of Russian attacks, states the Croatian Employers’ Association in its analysis of the week from last week.
Meanwhile, the media is announcing new trade sanctions against Russia, under which only the export of goods for humanitarian purposes would be allowed to that country. If this provoked a Russian embargo on wheat exports to the West, it would significantly increase demand for wheat from the EU and the US among those countries that have so far imported Russian wheat, although data shows that EU members have cut imports of Russian grain.
