The price of wheat is currently more than twice lower than two years ago. At that time, wheat prices hit a record high following the outbreak of war in Ukraine. However, the war is not the main reason for the current low prices.
So what’s happening on global commodity exchanges? Global wheat prices are nearly three times lower than those observed on March 7, 2022, when they reached record highs.
“Prices are much lower, year-on-year they have fallen by several dozen percent, and this calendar year there is a double-digit percentage difference, depending on the market we are looking at,” says Michał Stajniak, an expert from XTB, in an interview with MarketNews24. “The peak was a price of about 1,300 cents per bushel in the USA, while currently, it’s 545 cents.”
The drop in prices in Poland is even more spectacular. At the peak, we paid just over PLN 2,000 per ton of consumer wheat. However, in March this year, this price barely exceeded PLN 800.
The drop in prices in Poland is deeper, influenced by the export of Ukrainian wheat and related tariff issues.
“The fall in wheat prices in Poland is primarily due to the situation in global markets,” comments the XTB expert. “However, what is happening globally is mainly influenced by the fact that in Russia we had very strong data on the harvest in the last three seasons.”
The export of Russian wheat has grown significantly, and this year’s export levels will likely break records.
Before the season, there was a surplus of wheat not only in Russian warehouses, but also in the USA and Europe.
These stocks need to be sold before this year’s harvest. Hence, the significant pressure on falling prices. And the harvest could be very abundant, including in Australia and South America.
“In the USA, prices may fall to levels from the beginning of the pandemic, i.e. below 500 cents per bushel,” explains M. Stajniak from XTB. “If this year’s harvest turns out to be high, it can’t be ruled out that prices will drop to 400 cents, which are the minimum levels of the last several years, with the lowest noted in 2016.”
