IKAR in Mass and Industry Media

Russia grain prices firmer, domestic purchases rise

Reuters

MOSCOW, Dec 19 (Reuters) - Russian domestic and export grain prices rose slightly last week from the previous one as processors and exporters built up stocks ahead of the lengthy New Year and Christmas holidays, a grain sector lobby group and analysts said on Monday.

"The situation is rather unusual," Arkady Zlochevsky, president of the Russian Grain Union industry body told reporters.

"Normally, December is a month when all activity on the domestic market falls drastically. Now exports are on the decline, but... a relative price stability prompted buyers -mixed feed producers and millers - to start buying grain in order to build up stocks."

Average Russian EXW (ex-silo) wheat prices rose by 50 roubles ($1.56) per tonne last week, SovEcon agricultural analysts said in a weekly note, adding that most other cereals prices also showed a slight increase.

SovEcon said that maize, which kept declining in the last few weeks, also rose by some 25 roubles per tonne as it became relatively cheap compared to other feed grains. Animal breeders as well as exporters started buying it.

Exporters raised prices for the benchmark fourth-grade wheat at ports to 7,100-7,400 roubles per tonne from 7,100-7,300 roubles a week before, SovEcon said.

"A decline of the rouble has contributed to the increase, but the main reason behind it was the exporters' necessity to increase stocks ahead of lengthy holidays in order to honour already signed contracts," it said.

Free on board (FOB) prices for ordinary wheat with 11.5 percent protein content rose to $236 per tonne from $235, while wheat with 12.5 percent protein content rose to $243 per tonne from $242 as stocks in southern Russia dwindled, the Institute for Agricultural Market Studies (IKAR) said in a separate note.

Maize FOB price declined to $197 per tonne from $200 at shallow water ports due to competition from Ukraine, it said.

Sunseed prices rose to $340 from $329 per tonne, as supply of new crop seeds slowed down while crude sunoil weakened to $1,055 per tonne from $1,071, IKAR said.

Sunseed prices rose last week due to a rise in competition between crushers, SovEcon said.

Sugar price rose to 20,800 roubles per tonne in Krasnodar from 19,800 as the processing of sugar beets was slowing down, although a very high number - 74 out of 77 refineries - kept working last week, IKAR said. ($1 = 31.96 Russian roubles)

23.12.11

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