IKAR in Mass and Industry Media

Russian wheat prices weaken further despite sale to Egypt

Business Recorder

Russia's wheat prices have weakened further, despite its recent win of an Egyptian tender, which along with a weak rouble has boosted the competitiveness of exports, analysts said on Monday. Egypt, the world's biggest wheat importer, last week bought 180,000 tonnes of Russian milling wheat for shipment March 1-10, according to its state wheat buying body.

A sharp sell-off in the rouble in recent weeks, culminating in the currency hitting its lowest against dollar since March 2009, has made the country's wheat less expensive for importers who pay in dollars. Wheat prices in Russia continued to fall after the Egypt buy with the country's price index for 12.5 percent protein wheat on a free-on-board (FOB) basis edging down to $179 a tonne from $180, the Institute for Agricultural Market Studies (IKAR) said.

"Falling prices together with the weakening of the national currency have restored the competitiveness of (Russian) wheat on the global market," Andrei Sizov, head of the SovEcon firm of agricultural analysts, said in note. IKAR said it was unable to provide quotations for southern ports, because grain flows had been severely hampered by winter storms and ice. Bad weather has caused problems in Novorossiisk, Russia's largest Black Sea port, and on the railway to the port from its grain producing southern Rostov region.

Russian 2012/13 grain exports had exceeded 17.9 million tonnes, including more than 13 million tonnes of wheat, by the end of January, IKAR said. Meanwhile, sunflower seed prices continued to weaken, falling 150 roubles to 10,625 roubles ($300) a tonne at the end of last week, SovEcon agriculture analysts said. Export prices for sunflower oil rose slightly to $810-$820 a tonne on a FOB basis in the Black Sea, according to SovEcon. White sugar prices in Russia's south strengthened further to $692 per tonne from $682 per tonne, IKAR said.

06.02.14

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