IKAR in Mass and Industry Media

Harvesting, drought main Russia grain price movers

Reuters

MOSCOW, July 5 (Reuters) -Russian domestic grain prices declined last week in North Caucasus due to the start of the harvesting, while in other regions prices rose due to drought. Export prices strengthened, analysts said on Monday.

Average in silo (IS) prices for milling wheat fell in North Caucasus by some 300 roubles-350 roubles ($10.31-$12.02) per tonne with the harvesting start, feed wheat and barley by 150 roubles-200 roubles, SovEcon agricultural analysts said in a weekly note.

It said in the regions along the Volga river, in the Urals and in the Central Black Soil regions hit by drought, prices for all cereals rose by some 50 roubles per tonne.

The Institute for Agricultural Market Studies (IKAR) said in its weekly note it had lowered its 2010 grain output forecast further to 86 million-87 million tonnes from 87.5 million tonnes a week before.

The wheat output forecast was lowered to 56 million tonnes from 57 million. It expects barley output to be 14.5 million tonnes this year.

SovEcon cut last week its forecast for Russia's 2010 grain crop to 82 million-86 million tonnes from a previous 87 million and warned that it may cut it further to 80 million tonnes if extreme heat persisted.

IKAR said FOB prices in Russia's deep Black Sea ports for new harvest ordinary wheat with 11.5 percent protein content and bug damage of up to 1 percent rose to $167 per tonne from $164-$165.

FOB price at shallow water ports rose even more -- by $3-$4 to $140 per tonne. Feed barley export prices pressured by lower prices in neighbouring Ukraine, fell to $112-$115 per tonne, FOB Black Sea.

Russian grain exports, according to preliminary data, exceeded 21.250 million tonnes by June 25, including an absolute record of 18 million tonnes of wheat and 2.7 million tonnes of barley, IKAR said.

Sunseed purchase prices rose slightly to $374 per tonne from $372 followed by a further strengthening of domestic crude sunoil price and scarce supply of old harvest sunseeds, IKAR said.

SovEcon believes that average sunseed and sunoil prices were largely unchanged last week.

IKAR said rains have complicated winter rapeseed harvesting, but farm prices for rapeseed remained firm at 8,000 roubles or $286 per tonne.

SovEcon said that new crop rapeseed prices were between 8,000 roubles and 8,300 roubles per tonne last week, a decline of 200 roubles-300 roubles per tonne from a week before.

White sugar prices rose sharply both in dollar and rouble terms last week -- to $861 per tonne from $793 and to 27,000 roubles per tonne from 24,600 roubles in Krasnodar.

A combination of increased raw sugar customs duty, premium and exchange raw sugar price, the cost of production rose to an estimated 28,000 roubles per tonne from 26,000 roubles, so in theory there is still room for further price rises, IKAR said.

10.07.10

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