Black Sea countries: Food exports exposed to the risk of stoppage

Although all commodity markets are under pressure from weakening global demand and cheapening crude oil, wheat prices rose appreciably late in the week. Coronavirus-related concerns and restrictive measures taken by national governments in many countries, including Europe and the Black Sea region, pushed consumers to buy some food products as a reserve. In addition, some growth is seen in speculative purchases in preparation for a possible worsening of the situation and export restrictions.

Russia. The rouble’s exchange rate has slumped: its value is down 25% from early March. This caused a rise in grain exports from Russia, which were up 35% month-over-month on March 1-20. In total, 30 MMT has been shipped abroad this season that is still down 10% from a year ago (33.3 MMT), but the gap is narrowing. The government had not imposed any restrictions by March 20, besides 10-day restriction on groats exports (i.e. for the period of March 20-30, 2020). In addition, the Agriculture Ministry ordered the regions to stockpile food reserves for two months.

The imposition of further export restrictions cannot be ruled out if the situation deteriorates, i.e. in case of further rouble devaluation, active purchases in the consumer market, hitting the maximum export limit, or shrinking domestic stocks, UkrAgroConsult reports.