IKAR in Mass and Industry Media

Russian Wheat Exports Prices Down On Upcoming Crop

Reuters

Russian wheat export prices fell last week on expectations of an upcoming large crop, which may be the largest in the country’s post-Soviet history, analysts said on Monday.

If the weather remains favourable, Russia, a major global wheat exporter, will harvest 64.5 million tonnes this year, up from 61 million in 2015. It will be its third straight year of a large crop amid ample global supplies and low prices.

Black Sea prices for Russian wheat with 12.5 percent protein content were at $181 a tonne on a free-on-board (FOB) basis at the end of last week, down $3 from a week earlier, Russian agricultural consultancy IKAR said in a note.

While the harvesting of wheat is expected to start in early July, Russia’s southern regions have already started harvesting barley.

The data on its yield is yet to come but some market players are reporting low weights, SovEcon, another Moscow-based consultancy, said, adding that FOB prices for barley were at $160-164 per tonne at the end of last week.

The market is concerned about the quality of the new wheat crop after recent rains, above all in terms of protein content, and there are reports of the fungal disease fusarium in the southern regions due to excessive moisture, SovEcon added.

Russia exported 33.3 million tonnes of grains, including 24.1 million tonnes of wheat, between July 1 and June 15, the agriculture ministry said. The pace of grain exports was up 12 percent year on year.

Domestic prices for third-class wheat rose 200 roubles compared with the end week earlier to 12,175 roubles ($189.8) a tonne in the European part of Russia on an ex-works basis, according to SovEcon. Ex-works supply does not include delivery costs.

Russia has almost completed spring grains sowing. According to the agriculture ministry, farmers have sown 99.3 percent of their planned area — 30.8 million hectares as of June 17, down from 31 million hectares a year ago. Spring wheat was sown on 13.6 million hectares, up 3.3 percent from the originally planned area.

SovEcon also said average prices for sunflower seeds added 375 roubles and reached 26,000 roubles a tonne. Domestic sunflower oil prices remained at 54,500 roubles a tonne, while FOB Black Sea export prices were down $5 to $805 a tonne.

IKAR’s white sugar price index for southern Russia was at $683 a tonne at the end of last week, down $9 from a week earlier.

Source: Reuters

21.06.16

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