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Domestic and export prices of wheat generally above year-earlier levels

10/06/2020

In the exporting countries of the subregion, export prices of milling wheat in the Russian Federation and in Ukraine were relatively stable in May, after the increase in April, but generally above year-earlier levels. Although a decline in demand for export compared to the previous month put prices under downward pressure, this was mostly offset by support arising from reductions of production forecasts amid dry weather conditions in March and April. By contrast, in Kazakhstan, export prices of wheat rose further in May, reflecting solid demand amid trade restrictions, that were lifted from 1 June (FPMA Food Policies), and shrinking supplies. The reduced harvest last year, a weaker currency and a strong pace of exports during the season contributed to keep prices well above their year-earlier levels both in the export and the domestic market. Wholesale prices of wheat grain and wheat flour generally strengthened in the Russian Federation, while they weakened in Ukraine, where state regulation of prices of buckwheat, wheat flour and other socially important foods came into effect on 18 May. In the importing countries of the subregion, prices of wheat flour continued to increase in Tajikistan in May, due to tight domestic supplies and costlier imports from Kazakhstan, the country’s main wheat supplier. Further upward pressure was also provided by logistic disruptions due to the COVID-19 pandemic with only central markets open that, nevertheless, were not operating at full capacity. Prices remained stable or decreased slightly in Georgia and Kyrgyzstan, amid temporary measures put in place by the Governments to avert price increases, including emergency price control mechanism and maximum levels of wholesale and retail prices for a number of food items (FPMA Food Policies). Prices of wheat flour were relatively stable in May and only slightly above their year-earlier levels in Armenia, where export restrictions on staple foods were introduced in mid-April and will remain in place until 30 June 2020. Similarly, prices in Azerbaijan and in Belarus remained virtually unchanged in April and around their values a year earlier mainly reflecting the above-average outputs obtained in 2019. With regard to potatoes, another staple food in the subregion, prices increased seasonally in Armenia, the Russian Federation and in Kazakhstan in May. Seasonal increases were also recorded in Azerbaijan and Belarus in April. By contrast, prices decreased in Kyrgyzstan and Tajikistan but remained higher compared to May last year.