IKAR in Mass and Industry Media

Gap between Russian food, feed grain prices narrows

Reuters

MOSCOW, Sept 13 (Reuters) - The gap between Russian milling grains and feed grain narrowed last week as the low supply of feed grain caused by a severe drought pushed up prices of the lower quality grain, analysts said on Monday.

"All feed grain prices kept strengthening in reaction to their relative scarcity," the Institute for Agricultural Market Studies said in a weekly note.

Feed wheat prices rose to $164 per tonne from $162 in southern Russia, so that the price gap between high quality food wheat and lower quality feed wheat shrank further, it said.

Third-grade milling wheat prices declined in the south of Russia to $176 per tonne from $179 per tonne a week before, IKAR said.

Feed barley rose to $176 per tonne from $169, while maize price rose sharply to $200 from $184, IKAR said.

"As prices of milling and feed wheat came closer to each other, sellers, who had contracts to supply feed wheat, began partially substituting it with milling wheat," SovEcon agricultural analysts said in their note.

"The maize price rise may overtake that of other grains," it said.

Grain supply from the North Caucasus remained high after an export ban and the large crop in the region. All types of wheat were actively shipped to the centre of European Russia, SovEcon said.

Sunseed prices kept rising in spite of news that the government may curtail oilseed and sunoil exports, analysts said.

Average sunseed purchase prices reached 15,500 roubles ($501.6) per tonne, up from 15,350 roubles a week before, IKAR said.

"We believe that with an expected low sunseed crop and a subsequent decline in the sunoil output, restrictions will not influence the market substantially as there is little chance that sunseed and sunoil exports may be large," SovEcon said.

Crude sunoil FOB prices declined slightly to 37,000 roubles per tonne from 37,500, IKAR said. SovEcon said average EXW prices for sunoil rose by 500 roubles to 35,500 roubles per tonne.

White sugar prices rose to 28,700 roubles or $929 per tonne from 28,000 roubles or $912, IKAR said.

The replacement cost, or the cost of white sugar production from imported raws, has risen sharply to $987, so in theory there exists a further potential for growth, it said.

06.10.10

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