IKAR in Mass and Industry Media

Russian grain prices down on low exporters' demand

Reuters

MOSCOW, June 15 (Reuters) - Russian grain prices have fallen for the first time in the last eight weeks on lower demand from exporters, who are winding up business ahead of the new harvest, analysts said on Monday.

"Exporters are concerned about very weak seasonal demand and declining export values," the Institute for Agricultural Market Studies (IKAR) said.

It said the price of new harvest ordinary (fourth-grade) milling wheat was estimated at about $190 per tonne, while feed barley value had shrunk to less than $160, with demand remaining very uncertain because of lack of Saudi import subsidies.

Bid price for the old crop fourth-grade milling wheat had dropped to 6,200-6,300 roubles ($200.6-$203.8) per tonne CPT Novorossiysk, while new crop fourth-grade wheat was estimated at around $200 per tonne CPT Novorossiisk, SovEcon agricultural analysts said.

According to preliminary IKAR information, Russian 2008/09 grain exports have reached 21 million tonnes. The government has accumulated an unprecedented amount of more than 8.7 million tonnes of grain in its silos.

Despite proposals by market players, the government had not yet decided how to release part of its intervention stock and it was likely to be postponed to the next season, IKAR said.

"This is rather strange, as there was a definite need to free part of the storage space in the Southern and the Central Black Soil regions to accept new harvest grain," it said.

Internal prices in the south of Russia have changed only marginally. Third-grade wheat was priced at $192, fourth-grade wheat at $173, and feed wheat at $139, IKAR said.

Feed barley and maize have slightly declined to $113 and $142 per tonne, respectively.

SovEcon said fourth-grade milling wheat price may yet decline by 500-1,000 roubles per tonne.

SPRING SOWING

The spring sowing campaign showed an increase of 253,000 hectares year-on-year in the area sown by large and medium farms, which account for 80 percent of the total area sown this year, IKAR said.

Russian crude sunoil export price had followed the general oils rally and rose again by $10 to $860 per tonne, it said.

Domestic sunseed purchase prices stopped declining and ended the week at around $300 per tonne, IKAR said

SovEcon said average offer prices for sunseeds rose by just $25 per tonne, while sunoil prices were largely unchanged.

White sugar prices have dropped to $700, ex-factory, Krasnodar. Weak seasonal demand and incoming white sugar from imported raw's determine a bearish mood of domestic market.

16.06.09

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