IKAR in Mass and Industry Media

Russian wheat prices further down, still above competitive level

Reuters

MOSCOW, Oct 15 (Reuters) - Russian wheat export prices, on a downward trend since early October, fell further last week as demand ebbed but remained uncompetitive, SovEcon agricultural analysts said in a note on Monday.

Wheat export prices had added about 40 percent between June and September, pushed up by poor crop conditions and forecasts. This has resulted in Russia, one of the world's key wheat exporters, losing its global supply market share.

The purchase price of wheat with 11.5 percent protein content in Russian deep-water ports fell to 10,800-11,000 roubles ($350) per tonne last week from 11,000-11,200 roubles per tonnes on a carriage-paid-to (CPT) basis, SovEcon added.

"Russian prices went down slightly but did not reach a competitive level," a large trader told Reuters.

Russian export prices are still around $20 per tonne higher than global prices. Benchmark November milling wheat settled down 0.75 euros or 0.29 percent at 258.00 euros ($330) a tonne in Paris on Monday by 0958 GMT.

Russia, historically the world's number three global wheat exporter by volume, was hit by a drought this year, which has slashed its grain harvest by a quarter to 71.7 million tonnes.

Its 2012/13 exportable surplus was also decreased significantly to about 10 million tonnes of grains, of which more about 90 percent may have already been sold.

Since the start of October, Russia exported 720,000 tonnes of grains, including 520,000 tonnes of wheat, Russia's Institute for Agricultural Market Studies (IKAR) said on Monday. This figure excludes legumes, the head of IKAR Dmitry Rylko said.

From the start of 2012/13 marketing year, which began on July 1, up to the end of September, Russia had exported about 8.4 million tonnes of grains, including 6.7 million tonnes of wheat and some legumes.

Rumours have persisted that Russia will ban grain exports this year, as it did after a drought in 2010. But Russian President Vladimir Putin dispelled speculation on Wednesday, saying there were no talks over such a move, despite his concerns about rising grain prices.

Russia's average domestic EXW (ex-silo) prices for third-grade and fourth-grade milling wheat were stable at 9,750 roubles per tonne. Prices for fifth-grade milling wheat increased 25 roubles to 9,300 roubles per tonne last week, SovEcon said.

Maize (corn) prices decreased 50 roubles to 7,900 roubles per tonne, it added.

Domestic wheat prices in Siberia and Urals were stable last week ahead of a start of sales from the Russian government five-million tonnes grain intervention stocks.

The government is preparing to sell up to 110,000 tonnes of grain per week from Oct. 23 till the end of the year to stem rising domestic prices.

For sunseeds, prices fell by 1,200 roubles to 17,250 roubles per tonne, according to SovEcon. It pegged domestic prices for crude sunoil at 40,175 roubles per tonne, down 1,250 roubles, while export prices were stable $1,110-1,130 per tonne on a free-on-board (FOB) basis.

15.10.12

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