SovEcon, a leading Black Sea grain consultancy, has revised its 2024/25 Russian wheat export forecast downward to 42.2 million metric tons (MMT), a 0.6 MMT reduction from the previous estimate. This compares to 52.4 MMT exported last season and a three-year average of 44.2 MMT. The revision reflects persistently slow shipments and low profitability in export operations.
Export activity continues to lag behind historical trends. SovEcon estimates February wheat exports at just 2.0 MMT, compared to 4.1 MMT last year and a five-year average of 2.9 MMT. The primary constraint on exports remains low profitability, as Russian exporters are currently operating at a loss.
The Russian government has set a wheat export quota at 10.6 MMT for the February-June period. However, SovEcon expects that major traders, who secured the largest quotas, will not rush shipments, prioritizing margin improvements. As a result, the full quota may not be utilized.
In the short term, the strengthening ruble is also limiting export activity. On February 21, the Central Bank of Russia set the dollar exchange rate at 88.5, compared to 102.0 a month earlier. Meanwhile, weekly export duties continue to adjust with a lag, negatively affecting exporters’ margins.
The slow pace of Russian exports has been one of the factors supporting global wheat prices. Since the start of the year, prices for Russian 12.5% wheat have increased by $12 to $248/mt FOB.
In February, the USDA lowered its Russian wheat export forecast by 0.5 MMT to 45.5 MMT, though SovEcon believes further downward revisions may follow.
Meanwhile, SovEcon has increased its 2025/26 Russian wheat export forecast by 0.6 MMT to 38.9 MMT, citing slower export pace this season and rising carryover stocks.
Andrey Sizov, head of SovEcon, commented: “The market remains too optimistic about Russia’s wheat export potential this season. Limited domestic supply, a strong ruble, and negative exporter margins suggest that the export pace is unlikely to accelerate substantially in the near future. With historically tight global wheat supply and demand balances, this should provide support to global prices until the end of the season.”