MOSCOW, Jan 6 (Reuters) – Russian wheat prices are stable so far this year amid holiday-thinned trade, the IKAR consultancy said on Thursday, adding that the market was watching developments in neighbouring Kazakhstan, a major flour exporter.
Kazakhstan, which is also a major buyer of Russian wheat in Siberia, is experiencing its worst unrest since independence in 1991, spurred initially by protests against gas price hikes. On Thursday, Russia sent paratroopers there as part of an international peacekeeping force.
Russian wheat with 12.5% protein content loading from Black Sea ports for supply in January stood at $330 a tonne free on board (FOB) on Thursday, unchanged from late 2021, IKAR said. 0#IKAR
The internet is down in most parts of Kazakhstan and banks have temporarily suspended work, but this situation is unlikely to last for long, Dmitry Rylko, the head of IKAR, said.
“I do not see anything terribly dramatic in this for the grain industry as of yet,” Rylko said. “Kazakhstan needs to continue importing the Russian wheat and exporting its own flour.”
Traders in Ukraine, another major Black Sea wheat producer, said that wheat prices could still rise if the situation in Kazakhstan does not calm down in the near future.
“In Kazakhstan, many companies like to work on a prepaid basis. Who in such a situation will do it without communication and with closed banks?,” a trader in Ukraine said.
Russia is the world’s largest wheat exporter. Its exports fell by 38% in July-December, owing to a smaller crop and an export tax that will rise to $98.2 per tonne on Jan. 12.
Kazakhstan shares a free customs zone with Russia, supplies to it are not subject to this tax.
Russia’s New Year holiday started on Dec. 31 and will end on Jan. 10.
(Reporting by Polina Devitt and Pavel Polityuk; editing by Alexandra Hudson)
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