Frontrunner - 11th December 2020

World wheat markets posted sharp gains this week, recovering much of the losses they had made since the end of last month. The primary driver for these positive moves was news that Russia may introduce additional measures to control wheat exports. Russia has previously established a quota of 17.5 million tonnes to limit wheat exports between February and June 2021, but so far this has proved to have little impact on its domestic market prices.

President Putin criticised officials and market participants over rising prices for essential foodstuffs, such as wheat and flour, which are reported to have reached record levels in Russia. The Russian Prime Minister said measures must be taken to stabilise domestic food prices. Traders may now expect export taxes to be employed at some stage. The mechanism is already in place and could be implemented at any time. Potential for disruption of supplies from Russia, the world's leading wheat exporter, could lead to further volatility in world markets.

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