Wheat prices on the European market have risen to a 14-year high as Russia plans to restrict wheat exports.

 

Russia has announced it may raise wheat export tariffs or set quotas on exports in the first six months of 2021. If Russia raises tariffs, international demand for european union wheat is likely to increase, as wheat supplies have been depleted by exports and production in some countries fell this summer.

The recent active purchase of wheat by many customers, including Saudi Arabia , which bought more than 1.2 million tonnes of wheat on Nov. 1, was a major surprise to the market– also contributed to the price increase.

Wheat futures for March 2022 delivery on the Paris Euronext exchange rose sharply to 296.00 euros ($339.39) a tonne, the highest since September 2007 and well above the 13.5-year record reached on Wednesday of 290 EUR/ton; Wheat futures for December 2021 also crossed the psychological threshold of over 300 euros rising to a record high of €300.50.

Earlier this year, the Russian government taxed wheat exports to cool prices in the domestic market. Despite this, the country's wheat exports are still rising sharply. Despite the loss of the season this year, statistics show that EU wheat exports are still much higher than in the same period last year.

 

Photograph: Vinanet/VITIC/Reuters