IKAR in Mass and Industry Media

Russia’s domestic wheat price growth continues on weak rouble

Reuters

Russia’s domestic wheat prices rose for a second week in a row due to a weak rouble and demand from local consumers, analysts said.

Domestic wheat prices in Russia, a top wheat exporter to North Africa and the Middle East, have been rising despite state curbs on exports aimed at constraining food price rises.

At the end of last week, prices for third-class wheat were up 50 roubles compared with a week earlier at 10,750 roubles per tonne in the European part of Russia on an ex-works basis, according to SovEcon consultancy.

The growth in wheat prices has been supported by demand from consumers building up stocks in the European part of Russia and by expectations that the agriculture ministry would increase prices at which it buys grain for state stocks on domestic market, SovEcon said.

The ministry currently offers up to 10,100 roubles for a tonne of third-class wheat in the European part of the country. It said last week that it had decided to keep this unchanged.

Last week it managed to buy 4,000 tonnes of grain, down from 8,000 tonnes a week earlier, bringing purchases to 353,000 tonnes since the start of the campaign.

Russia exported 296,000 tonnes of grain, including 87,000 tonnes of wheat, in the first 11 days of February, ministry data showed.

Since the start of the marketing year on July 1, 2014, the country has exported 23.6 million tonnes of grains, including 18.6 million tonnes of wheat, up 32 percent, year on year.

IKAR, another consultancy, estimates grain exports, including supplies to Kazakhstan and pulses, at 24.5 million tonnes, it said.

On the supply side, the number of offers to sell wheat rose last week as some farmers needed cash before the start of the spring sowing campaign, analysts said.

The ministry may soon be forced to decrease its stock as the government is considering allocating 400,000 tonnes of wheat to the city of Moscow.

In the domestic sunflower seed market, SovEcon said prices rose 350 roubles to 22,450 roubles per tonne, while FOB Black Sea prices for crude sunflower oil were flat at $740-750 per tonne.

IKAR’s white sugar price index for Russia’s south was at $632 per tonne, up $1 from a week ago.

18.02.15

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