London — Russian wheat origination costs are rocketing as supply tightness concerns heighten. Receive daily email alerts, subscriber notes & personalize your experience. The growing shortage of wheat to export, at or near main ports, has left silos dry and pushed sellers to peruse remote regions in order to originate, sources said. Origination costs for 12.5% protein wheat are now heard as high as $248-$250/mt, according to sources, while 11.5% protein wheat, Egypt's preferred protein grade, is available for $240/mt. Market participants are now searching Volga and other Central regions as well as Siberia to originate. Parcels coming from Siberia are said to take three weeks due to the "long distance," a source said, amid a shortage of railwagons. Furthermore, the sheer time taken to deliver the cargo means it is difficult to hire a railwagon as owners prefer quick trips. For example, origination from wheat sources near ports can take up to a week to deliver. By hiring out cargoes for such a period allows owners to put their wagon back on the market more quickly. Do you want to have access to transparent and relevant real-time news, market commentary, analysis and data on the grains market before competitors do? Click the link below and we will send you 10 issues of Daily Grains free to preview. Prices are expected to remain firm over the next months until more new crop data is made available. The surging domestic price of wheat has kept the Russian ministry of agriculture privy to implementing export restrictions, sources said. While no formal restrictions have been implemented, the ministry has repeatedly iterated that it is keeping track of export volumes in between informal meetings with trading houses. As of January 10, starting July 1, 2018, Russia has exported 24.7 million mt, up 4.3% on the year and drawing closer to the 35 million mt rough export forecast for the marketing year. --James Colquhoun, james.colquhoun@spglobal.com --Edited by Ikhhlaq Singh Aujla, newsdesk@spglobal.com
Wheat origination costs in Russia's main ports have risen significantly following shortages for export, with costs reportedly now 240 per metric tonne (mt) for 12.5% protein wheat, while for 11.5% protein wheat the price is $as high as $248-$250 per mt . From 1 July of 2018 to 10 January of this year, the country's wheat exports had risen 4.3% YoY to 24.7 million metric tonnes (mt), leaving little left of the 35 million mt forecast for export during the marketing year. The tightness has forced sellers to seek wheat from remote areas, such as Russia's central regions and Siberia.