IKAR in Mass and Industry Media

Russia wheat rises, interest in govt tenders low

Reuters

MOSCOW, Feb 9 (Reuters) - Russian wheat exporters are paying more for domestic grain as demand increases, leading to a drop in purchases at the government's intervention tenders, analysts said on Monday.

Fourth-grade milling wheat prices rose to 6,200-6,500 roubles ($170.5-178.7) per tonne, CPT Novorossiisk, last week and Egyptian company Horus bought 28,000 tonnes of Russian wheat at $192 per tonne FOB, agricultural analyst group SovEcon said.

Offers for Russian wheat are now being received within a range of $194-210 per tonne FOB, although a long-term weakening in international prices would probably lead to a gradual slowdown in export demand from Russia, SovEcon said. The state bought only a modest 235,440 tonnes during its five intervention tenders last week, more than half of which was feed barley. It has bought a total of 6.85 million tonnes since the tenders began in August.

"Actual physical grain reception into intervention stocks is much lower than the nominal purchase amount, and accounts for only 3.5 million tonnes," the Institute for Agricultural Market Studies (IKAR) said. Some sellers prefer to pay a fine and, rather than supply the government, re-sell the grain on the open market, where prices are higher.

Feed maize rose more than other grains in the last week, adding 450 roubles a tonne, compared with an average 200-300 roubles, SovEcon said. Farmers are holding back maize in the expectation that prices will rise further.

Sunseed and sunoil prices also rose. IKAR said sunoil export prices ended the week at about $700 per tonne, FOB Novorossiisk, while sunseeds rose to $265-290 per tonne.

"Producers are not willing to sell on the bullish market," IKAR said. But the bull market will not last forever. The sharp rise in Russian sunoil prices is making the product less competitive on international markets.

"As long as the export price stays in the region of $700 per tonne FOB and the rouble exchange rate stays at current rates, we can expect the sunoil market to stabilise, followed by that of sunseeds," SovEcon said.

Domestic white sugar prices finished the week at about 20.1 roubles per kg, basis Krasnodar. "The market remains very thin, but millers have started gradually to raise prices again against the background of a strengthening dollar," IKAR said.

24.02.09

All viewing: 76
Discuss