IKAR in Mass and Industry Media

Russia grain export prices fall fast, domestic less

Reuters

MOSCOW, Aug 17 (Reuters) - Most Russian grain exporters kept lowering bid prices last week, but domestic prices did not follow suit rapidly enough, analysts said on Monday. Export prices declined to $172 per tonne for ordinary milling wheat and to $132 per tonne for feed barley, both FOB Novorossiisk, the Institute for Agricultural Market Studies (IKAR) said.

A slower decline of domestic farm prices is making export operations unprofitable, it said.

"Exporters are hesitant to strike forward contracts for September. To be competitive, domestic purchase prices need to decline further, which is very bad news for local producers," IKAR said.

SovEcon agricultural analysts said that on the one hand most traders lowered bid prices and some even stopped purchases at elevators outside ports.

"But, on the other hand certain exporters keep buying grain at old prices at some shallow water ports," it said adding that possibly some traders kept fulfilling urgent contracts.

Bid prices for ordinary fourth-grade wheat CPT Novorossiisk are in the range of 4,700-4,800 roubles ($148.2-$151.3) per tonne, at shallow water ports at 4,300-4,700 roubles per tonne, SovEcon said.

Domestic ex-silo prices declined both in rouble and dollar terms, IKAR said. Third grade wheat fell by $11 to $146 per tonne, fourth-grade by $8 to $120 and feed wheat by $3 per tonne to $109 in southern Russia.

SovEcon said third-grade wheat lost 100 roubles per tonne on the average, fourth-grade 175 roubles and fifth-grade feed wheat 125 roubles.

SovEcon said a decline of U.S. and French wheat prices give little hope that Russian export prices may recover. Farmers wait for the start of the government purchases, which SovEcon believes are unlikely to push the market up rapidly.

Crude sunoil price increased to $755 per tonne, FOB Novorossisk, IKAR said. Domestic price increased to 26,000-27,000 roubles per tonne.

Domestic winter rapeseed purchase prices in southern Russia remained in the range of 7,500-8,000 per tonne, it said.

White sugar prices fell in dollar terms to $746 per tonne from $770 a week before, but remained unchanged in rouble terms.

Trading activity was low, with players waiting for sugar beet processing, which has been delayed this year, IKAR said.

10.09.09

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