IKAR in Mass and Industry Media

Russian Wheat Prices May Drop as Much as 20%, Institute Says

Bloomberg

Aug. 10 (Bloomberg) -- Russian milling wheat of export quality may fall as much as 20 percent in the current season on the country's domestic market, according to the Institute for Agricultural Market Studies.

Average farm-gate prices are set to drop to between 4,700 rubles ($160) and 5,000 rubles a metric ton from 5,660 rubles to 6,250 rubles now, Oleg Sukhanov, grain analyst at the Moscow-based institute, told Bloomberg yesterday in Rostov-on-Don in southern Russia. Feed wheat may fall below the cost of production, which is under 3,000 rubles a ton, he said.

Russian wheat is now quoted at $260 to $280 a ton on a free-on-board basis in the port of Novorossiysk, according to the analyst. That's composed of current farm prices plus as much as 1,200 rubles in costs for transportation to port silos and about 800 rubles for transloading at grain terminals, Sukhanov said.

Ikar, as the institute is known, raised its estimate for the current period's grain crop to as much as 92 million tons from 89.5 million tons, Sukhanov said. Last year's harvest came to 60.9 million tons after Russia's worst drought in at least half a century devastated fields.

The new crop will include between 56 million and 57 million tons of wheat, 16 million tons of barley and 5 million tons of corn, according to Ikar estimates cited by Sukhanov. It also will include 14 million to 15 million tons of secondary cereals such as buckwheat and oats and other grains, he said.

30.08.11

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