By Russia’s total wheat stocks as of January 1 were recorded at 28.7 million metric tons, according to SovEcon’s estimate, which is based on quarterly data from Rosstat.
This figure represents the total amount of wheat stored within the country at the beginning of the year and serves as a critical indicator for assessing the nation’s food security and export potential in the coming months.
Russian wheat stocks have decreased significantly compared to last year, currently sitting at 21% below the previous year’s level.
Widening gap
This decline is a widening trend, as the gap was only 14% in October.
The primary factor driving this increasing disparity is the active selling practices of agricultural producers in Russia, SovEcon said in its latest update.
Total wheat stocks encompass all wheat stored both on farms and in off-farm storage facilities, such as grain elevators, silos, and warehouses.
This data typically excludes stocks held by small-scale companies due to the difficulty and cost of collecting information from numerous small entities.
The data on total wheat stocks is crucial for understanding the overall supply and demand situation for wheat, which can impact wheat prices and inform policy decisions related to food security and agricultural production.
All major regions see a decline in wheat stocks
Wheat stockpiles have seen a significant decline across all major exporting regions in Russia compared to the previous year.
This decrease is particularly pronounced in the southern region, where current stocks are recorded at 7.8 million metric tons, marking a sharp 37% drop from last year’s levels.
Similarly, the central region is experiencing a substantial reduction in wheat stocks, currently holding 6.3 million metric tons, which represents a 32% decrease compared to the same period last year.
While the decline is less severe in the Volga region, stocks still remain 17% lower than last year, currently standing at 6.4 million metric tons, according to SovEcon’s estimates.
This widespread decrease in wheat stocks across key exporting regions raised concerns about potential impacts on global wheat supply and prices in the coming months.
Stockpiles in farms
Meanwhile, wheat stocks on farms have significantly declined. As of January 1, they were 15.4 million metric tons, which is 29% lower than last year.
Farmers actively sold their wheat stocks in December, with sales reaching 4.8 million metric tons compared to 4.3 million metric tons in the previous year.
This high sales activity, despite relatively low production levels, has resulted in significantly lower on-farm wheat stocks compared to last year, SovEcon said.
Meanwhile, the off-farm wheat stocks, which refer to the wheat stored in facilities outside of the farm, such as grain elevators, mills, and processing plants, remained at a relatively high level.
This is due to a combination of factors, including increased purchasing by exporters and consumers.
As of January 1, off-farm wheat stocks were estimated to be at 13.3 million metric tons, which represents a 9% decrease compared to the same period last year.
This decrease can be attributed to various factors, such as changes in production, consumption patterns, and trade dynamics.
Expectations of a rise in wheat prices grow
Exporters have been actively purchasing grain for future campaigns or in anticipation of potential price increases.
This proactive approach allows them to secure supply and manage their risk exposure.
Similarly, consumers have also been actively buying grain due to concerns about potential shortages.
The comparatively low production levels this season have caused a significant decrease in stocks.
The 2024 Russian wheat crop is preliminarily estimated by Rosstat to be 82.4 million metric tons, notably lower than last year’s 92.8 million metric tons.
Andrey Sizov, managing director, SovEcon said:
The reduction in stocks will support prices in both the global and Russian markets.
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