IKAR in Mass and Industry Media

Russia grain prices down ahead of new crop

Reuters

MOSCOW, June 22 (Reuters) - Russian grain prices continued declining last week with little trading activity ahead of the start of the new harvesting campaign, analysts said on Monday.

New crop ordinary milling wheat export prices plunged to about $180 a tonne, while feed barley shrank to less than $155, mainly due to lack of positive decision on Saudi import subsidies, the Institute for Agricultural Market Studies (IKAR) said.

Internal prices for old crop grain did not change much with minimal trade activities, it said.

Harvesting is expected to start in the next few days in North Caucasus. Farmers are cleaning storage capacities and actively discussing new crop grain prices, SovEcon agricultural analysts said.

It said prices of 3,600-3,800 roubles ($115.8-$122.2) excluding 10-percent Value Added Tax for fourth-grade milling wheat and 2,500 roubles for feed barley are being discussed.

A tender recently announced by the Egyptian General Authority for Supply Commodities (GASC) is largely believed to be an important indicator for the Russian market.

Most Russian grain was offered at prices $190-$200 per tonne FOB, which suggests a domestic fourth-grade wheat price of 5,300-5,400 roubles CPT Novorossiisk, SovEcon said.

Actual price levels will depend on competition on world markets and farmers' demand for funds for loan repayment. Other factors include the harvest and the start of government grain purchases, as well as exports of grain from government stocks, it said.

Domestic sunseed prices declined by some 75 roubles per tonne last week, while sunoil prices remained practically unchanged SovEcon said. It does not expect a new rise with the current negative dynamics of export prices.

Crude sunoil export prices have plunged to $790 per tonne FOB Novorossiisk, sunseed purchase prices have declined to less than $300 per tonne, IKAR said. It has raised its 2009 sunseed output forecast to 6.94 million tonnes.

Domestic sugar prices declined further last week to $690 per tonne in Krasnodar.

Despite the fact that total raw sugar imports in 2009, including approaching vessels, has fallen by more than half a million tonnes year-on year, sugar stocks are still estimated to be 200,000 tonnes up from the same time of last year, IKAR said.

30.07.09

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