The cost of wheat has fallen significantly on the world market

The analyst of the World of NAN editorial board provides a brief overview of the world markets of agricultural products for February 5 - 16.

Prices for wheat in the world for the previous two weeks decreased significantly, reaching the levels that were last recorded in late November. Chicago soft wheat prices fell 6.7% to $206 per ton. And hard red winter fell 9.4% to $209. The overall decline was driven by a number of factors and news related to production and exports. Russia raised its wheat production forecast for the 2024-25 season from 92.2 to 93.6 million tons. In addition, export quotas for grain through the end of June 2024 were increased from 24 million to 28 million tons. Also in the US, preliminary forecasts of wheat production for the next season were almost 5% higher than actual production in 2023-24.

A similar situation is observed in prices for export Russian wheat in Black Sea ports. The price index fell 1.9% after a long lapse to end at $246 per ton. The duty on Russian wheat exports rose 8.9% over the two weeks and was the highest this year. According to data of Kazakhstan commodity exchange ETS, there were no any deals on wheat in 2024. Recall that the last deal was held on December 26 at a price of ₸136 thousand per ton of wheat with gluten 25-26% and 27%.

Sugar during these two weeks fell in price by 3.9%, thus decreasing for the first time after the wave of growth in January.

The exchange price in London reached $636 per ton of sugar. One of the negative news for the price was the fact that in the second half of January in Brazil sugar production increased by 68.5% y/y to 28 thousand tons. As a result, for the whole current season the production grew by 25.5%. In addition, 49% of cane has already been processed, which is noticeably higher than last year's 46%. On the other hand, the forecast for production in Thailand was lowered from 7-8 million tons to 7-7.5 million tons this year by local company Thai Sugar Millers Corp.

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