IKAR in Mass and Industry Media

Russia grain prices fall, market eyes interventions

Reuters

MOSCOW, Sept 1 (Reuters) - Russian grain export prices fell 2-4 percent in the last week due to low world demand and the build-up of grain from the new harvest, with suppliers now awaiting government intervention purchases to prop up prices. Forward export prices for ordinary milling wheat fell to $162.5 per tonne, free on board (FOB) Novorossiisk, from $167 a week ago, the Institute for Agricultural Market Studies (IKAR) said.

IKAR also expects Russia's 2009 grain harvest to reach 92.5 million tonnes, up from a previous forecast of 90.5 million tonnes and above the Agriculture Ministry's estimate of 85 million tonnes. IKAR raised its forecast in anticipation of a big harvest in the Siberian regions of Tyumen, Omsk, Altai and Novosibirsk, as well as the over-estimation of the effects of drought along the Volga river. Moscow-based analyst group SovEcon said exporters were buying fourth-grade milling wheat at 4,500-4,600 roubles per tonne, CPT Novorossiisk, down from 4,700-4,800 roubles in the previous week.

Egyptian state grain buyer GASC bought two 30,000-tonne Russian wheat cargoes in the last week, one from Louis Dreyfus at $169.50 per tonne and one from Valars at $172 per tonne.

Egypt was the main buyer of Russian grain in July, taking 336,000 tonnes, or 39 percent of Russia's exports in the month.

SovEcon said it expected grain prices to stabilise in the near future. Government intervention purchases are expected to start this month, although no firm date has been set.

"State purchases should offer some support to prices and, as a result, the market could finally find its seasonal low in the autumn," SovEcon said.

Russia has exported a record amount of sunoil this season, with shipments reaching about 820,000 tonnes by the end of August, IKAR said. Early negotiations on sunseed purchase prices are fixed in a range of 9,000-10,000 roubles per tonne.

The first beet sugar shipments began last week, although volumes to date have been low. Suppliers have struck deals at 24,000 roubles, or more than $759 per tonne, basis Krasnodar, for shipments in September, IKAR said.

10.09.09

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