IKAR in Mass and Industry Media

Russian grain, sunseed prices down, supply low

Reuters

MOSCOW, May 26 (Reuters) - Russian grain and sunseed prices declined last week ahead of the start of the new crop year, analysts said.

Market activity was low as many traders sent their staff on holiday while processors had accumulated sufficient stocks, SovEcon agricultural analysts said in a weekly note.

The general market mood was mixed last week, the Institute for Agricultural Market Studies (IKAR) said.

"International traders have already absorbed the upcoming future harvest crop's substantial potential price decline, while producers were still living in the past, as usual," it said.

"In addition, the price decline has not started in the eastern part of Russia, where millers and animal feed producers have yet to survive for more than three months before new-harvest grain starts pouring in."

Domestic prices for third-grade wheat declined to $369 per tonne from $377 last week, fourth-grade to $355 per tonne from $361 and fifth-grade feed wheat to $345 from $354, IKAR said.

The feed barley market was also highly fragmented and volatile. After a recent series of corrections, feed barley prices were in the range of $292-$296 per tonne in the Central Black Soil region, while in southern Russia they declined to $255 per tonne, it said.

Average Russian grain prices declined by 100-200 roubles ($4.24-$8.47) per tonne and SovEcon expects them to fall further.

LITMUS TEST

Egypt has finalised the results of a tender for milling wheat supply in July and August, SovEcon said.

The lowest offer prices of Russian wheat were $340-$350 per tonne CIF, which is close to the expected new crop prices of $300 FOB Novorossiisk after the expiry of the prohibitive export tariff.

Alexandria Grain firm was named the winner with 60,000 tonnes of wheat at $329 per tonne.

However, many participants in the tender had offered Russian wheat at $365-$395 per tonne, possibly expecting that the tariff may be extended but its rate lowered.

SovEcon said Russian feed barley exports, even those from the old crop, may prove to be competitive after the export tariff expires from July 1, as global purchasing has pushed prices up.

Grain stocks were approaching those of last year. According to preliminary data, as of May 1 stocks were 16.4 million tonnes, down 0.7 million tonnes year-on-year.

SUNSEED, SUGAR IN DECLINE

Sunseed prices kept declining last week, with crushers lowering purchase prices in a thin market, SovEcon said.

Traders expect new-crop winter rapeseed to appear on the market with prices in the region of 15,000 roubles per tonne compared to 8,000-9,000 roubles a year ago, it said.

Crude sunoil declined by some 600 roubles per tonne on high supply.

IKAR said the Russian sugar market declined noticeably last week, but added the cash market was practically non-existent due to very limited supply. Forward benchmark Krasnodar prices declined to $734 from $746 per tonne, IKAR said.

13.08.08

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