IKAR in Mass and Industry Media

Short supply of high quality Russian wheat spurs price rise

Reuters

MOSCOW, Sept 16 (Reuters) - Russian prices for high quality wheat rose last week due to a shortage of supply, analysts said on Monday, signalling problems for exporters needing globally competitive price levels.

Russia, the world's fifth-largest wheat exporter, hopes to increase exports following a better harvest than last year, when drought reduced the crop, but the quality is poor and there is not enough third class milling wheat.

"Domestic prices for third class wheat in the European part of Russia rose slightly last week, reacting to problems in sourcing high quality wheat," Dmitry Rylko, the head of the Institute for Agricultural Market Studies (IKAR), said.

Russia's wheat prices are also being supported by concerns over delays in harvesting in some regions, due to rain, and in sowing of winter grains for next year's crop.

Russia is expected to boost the 2013 wheat harvest by one-third to 50 million tonnes, of which 43 million tonnes has already been harvested.

Its grains exports are officially expected to rise 25 percent to 20 million tonnes, of which 7.2 million tonnes of grains, including 6.1 million tonnes of wheat, have been shipped between the July 1 start of the 2013/14 year and Sept. 10.

Russian prices for third-class wheat rose to 8,100-8,400 roubles per tonne in deep-water ports on a carriage-paid to basis (CPT) last week from 8,000-8,100 roubles per tonne a week earlier, SovEcon agricultural analysts said.

Prices for fourth-class wheat were stable at 7,500-7,800 roubles per tonne in Novorossiisk and down 100 roubles at 7,200-7,400 roubles per tonne in shallow-water ports on a CPT basis, it added.

Prices for wheat with 12.5-percent protein content were down $1 at $250 per tonne on a free-on-board (FOB) basis in the Black Sea port of Novorossiisk last week and flat at $220 per tonne in the Azov Sea, according to IKAR.

In Ukraine, a major competitor of Russia on export markets, prices for wheat with 12.5-percent protein content were quoted at $242-$245 per tonne for September-October delivery on a FOB basis in deep-water ports on Monday, according to analyst UkrAgroConsult.

Russian prices for new-crop maize (corn) were quoted at $190 per tonne in Black Sea and at $169 per tonne in the Azov Sea, IKAR added.

Meanwhile, domestic prices for new crop sunflower seeds continued to decline and were quoted at 11,400 roubles per tonne, down 25 roubles on a carriage-paid to (CPT) basis in North Caucasus region, SovEcon said. IKAR pegged prices at 11,050 roubles, down 40 roubles.

Export prices for sunflower oil rose 230 roubles to 29,000 roubles ($890) per tonne, according to IKAR, and were quoted at $850-860 per tonne, down $10, on a FOB basis in the Black Sea by SovEcon.

Soybeans prices in Russia's South rose 1,000 roubles to 18,500 per tonne, IKAR added.

It quoted South Russian white sugar prices down 600 roubles at 22,700 roubles per tonne.

($1 = 32.5062 Russian roubles)

16.09.13

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