IKAR in Mass and Industry Media

Tenders suggest Russian grain price decline

Reuters

MOSCOW, Sept 15 (Reuters) - Falling world grain prices have forced Russian grain traders to compete intensively on export markets and recent grain tenders results indicate that Russian domestic prices may decline in the coming weeks, analysts said.

Tunisia's state grain agency bought last Friday 92,000 tonnes of soft wheat at $284.00-$287.97 per tonne. Traders said the wheat could be of Black Sea origin.

"Judging by the most recent Tunisia tender, by November Russian export prices may decline to $230-240 (per tonne)," the Institute for Agricultural Market Studies (IKAR) said.

Egypt's government last Wednesday bought three cargoes of 25,000 tonnes each of Russian and Ukrainian wheat at $250 per tonne.

"We believe that this price creates conditions for the stabilisation of Russian food wheat market at current levels," SovEcon agricultural analysts said.

"But if the world's commodities markets keep sliding down, we may witness the formation of a downward trend on the Russian market, which, taking into account an expected record crop, maybe quite steep."

Russia officially expects to harvest no less than 95 million tonnes of grain this year, but SovEcon believes the crop may be 100-105 million tonnes.

IKAR said Russian wheat export prices continued to decrease together with the international ones. It estimated the current FOB Novorossiisk ordinary wheat price at $250-$260 with prospects of further decline in the nearest weeks.

SovEcon said domestic prices were either stable, or rising slightly last week.

It said the rise of third-grade milling wheat prices had slowed to 25 roubles ($0.970) per tonne from 100-150 roubles in the previous several weeks. Fourth-grade wheat prices were rather stable. "Domestic food wheat price movements were mixed with prices in southern Russia being rather stable under the influence of the cooling international market, while in the Central Black Soil region they rose slightly on millers' demand," IKAR said.

Feed wheat prices rose under the influence of state intervention purchases, with some 109,000 bought since the beginning of September, it said.

Feed wheat and feed barley added 25 roubles per tonne, SovEcon said.

Maize price fell down further to $155, ex-silo, South Russia, IKAR said.

Sunseed prices have fallen to $325-$330 per tonne under the pressure of the harvesting campaign, IKAR said.

"Crushers have lowered prices for the new harvest seeds to some 9,000 roubles per tonne on the average, with some lowering them further to 8,000 roubles including delivery from 12,000 roubles at the start of the season," SovEcon said.

Sunoil prices have fallen to $1,010-$1,030 in the south of Russia and to $1,080-1,090 in the Central Black Soil region, IKAR said. Rapeseed oil in the south of Russia was traded at $1,020-$1,030 last week.

White sugar price declined by $20 to $555 per tonne, ex-factory, Krasnodar.

25.09.08

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