IKAR in Mass and Industry Media

Russian wheat prices down on weak global benchmarks

Reuters

Russian wheat export prices fell for a third week following a decline in global benchmarks and delayed supplies to Egypt, the world's largest buyer, analysts said on Monday. Moscow is seeking talks with Cairo over Egypt's recent delays in approving Russian wheat shipments, Russia's food safety watchdog Rosselkhoznadzor said earlier.

Black Sea prices for Russian wheat with 12.5 percent protein content for September delivery were $168 a tonne on a free-on-board (FOB) basis at the end of last week, down $2.50 from a week earlier, Russian agricultural consultancy IKAR said. SovEcon, another Moscow-based consultancy, quoted FOB wheat prices in the Black Sea area down $1 at $171.50 per tonne. Egypt, the largest buyer of Russian wheat, has not issued approvals for Russian wheat shipments since Cairo adopted a zero tolerance policy on the ergot fungus in late August, according to Rosselkhoznadzor.

"The continuing problems with supplies to Egypt do not add optimism," SovEcon said. It believes Egypt will have to drop its policy sooner or later, but until it does Black Sea and European wheat prices will be under pressure. Russia exported 6.4 million tonnes of grains, including 5.4 million tonnes of wheat, between July 1 and September 7, the agriculture ministry said. Grain exports were down 5 percent year on year.

Official customs data have lagged real supplies this year due to technical issues, analysts have said. In the domestic market, farmers are still holding wheat of higher quality - third class wheat - hoping for stronger prices, SovEcon said. Domestic prices for the third class rose by 50 roubles last week, from the previous week, to 10,100 roubles ($156) per tonne in the European part of Russia on an ex-works basis. Ex-works supply does not include delivery costs.

However, prices for fourth class wheat fell in southern Russian regions for the first time since late July. They were down 100 roubles to 9,650 roubles per tonne. The market has also started to offer maize (corn) of the new harvest. In the deep-water ports, bid prices are at 9,800-10,000 roubles per tonne. New crop sunflower seed prices are in a range of 20,000-23,000 roubles per tonne, SovEcon added. IKAR's white sugar price index for southern Russia fell $12 last week to $570.6 a tonne at the end of the week.

19.09.16

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