IKAR in Mass and Industry Media

Russian govt grain purchases pick up as prices fall

Reuters

MOSCOW, Feb 24 (Reuters) - Russian government grain purchases more than doubled last week from the previous week as market prices fell sharply, analysts said on Tuesday.

Purchases rose to 250,000 tonnes last week as weaker domestic prices revived producers' interest in the government tenders, the Institute for Agricultural Market Studies (IKAR) said.

Prices rose 30-50 percent from November to the middle of February, SovEcon agricultrual analysts said.

But the main drivers of the rise - government purchases, high international prices and the rouble devaluation, as well as increased demand from domestic processors resulting from low stocks -- lost their momentum in February, it said.

SovEcon expects a further price fall, which it believes may be steep with high producers' grain stocks and falling international prices.

IKAR said the ordinary wheat export forward price shrank to $180-$185 per tonne, FOB Novorossiisk. SovEcon said some exporters offered 5,800-6,000 roubles ($160.8-$166.3) per tonne of fourth-grade wheat CPT Novorossiisk.

In the south of Russia, third-grade wheat ended the week at $168 per tonne, fourth-grade at $146 and fifth-grade feed wheat at $114, down $5 to $7 per tonne, IKAR said.

SovEcon said fourth-grade wheat led the fall, losing some 250 roubles per tonne. The analysts expect supply to increase in supply and price falls to accelerate.

Export activity was quite high last week, and IKAR forecasts grain exports to exceed one million tonnes in February.

It said the feed barley price last week remained almost unchanged at $103 per tonne, while maize fell to $109 per tonne.

Russian sunoil export prices have fallen substantially to $660-$680 per tonne, FOB Novorossiisk, on favourable weather conditions in the southern hemisphere with rains in Argentina and in the south of Brasil, IKAR said.

SovEcon said the crude sunoil price lost some 700 roubles last week, while processors lowered bid prices for sunseeds to 9,000 roubles per tonne from 10,000-11,000 roubles a week before.

Last week, domestic sunseed purchase prices fell to $260-$280 per tonne, in line with IKAR expectations, as producers had accumulated stocks several times larger than a year ago, IKAR said.

It said rouble-denominated white sugar prices rose due to a strengthening of the rouble, while prices in dollar terms fell to $568 per tonne from $573. Domestic demand remains quite weak, as stocks are still too high, IIKAR said.

27.03.09

All viewing: 81
Discuss