IKAR in Mass and Industry Media

Russian Wheat Exporters Drop Prices to Win Tenders, Ikar Says

Bloomberg

April 19 (Bloomberg) -- Russian wheat exporters, who last sold grain to the world's biggest importer in January, cut prices in an effort to win more international tenders, the Institute for Agricultural Market Studies said.

Wheat now costs $265 a metric ton at the Black Sea port of Novorossiysk on a free-on-board basis, down from $280 in the middle of March, Oleg Sukhanov, head of market analysis at Ikar, as the Moscow-based institute is known, said by phone. Shippers aim to compete with U.S. and French crops, he said.

Egypt, the largest global buyer of wheat, has purchased mostly U.S.-grown supplies since the start of February as well as Canadian, Australian and Argentine grain. Russian exporters succeeded in pressing local farmers to lower prices, and shippers are now eligible to purchase grains from state inventories for delivery abroad, Sukhanov said.

Prices for fourth-grade milling wheat, the main variety shipped from Russia, slid 7.4 percent from a month earlier to 6,483 rubles ($220) a ton in the North Caucasus Federal District by the end of last week, according to Grain Union data.

Exporters probably will purchase 400,000 to 500,000 tons of government grain in southern silos for foreign sale before the current crop year ends on June 30, Sukhanov said. Today is the first session in which shippers can buy from state stockpiles.

Sales of government grain on Russia's domestic market began April 4 and through yesterday had reached 574,063 tons, out of a planned 2 million tons.

Sukhanov also said Russian millers, animal-fodder makers and livestock producers, who were buying grain from farms, are now making lower-priced purchases from state reserves. That left grain farmers with fewer customers and more incentive to sell to exporters, he said.

Russia may export 20.5 million tons of wheat in the current crop year, which would make it the world's third-largest shipper of the grain, according to U.S. Agriculture Department estimates.

15.05.12

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