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IKAR in Mass Media

Russia grain prices stable; wheat, maize rise

29 декабря 2008 года

MOSCOW, Dec 22 (Reuters) - Russian domestic grain prices were generally stable last week with wheat and maize prices rising on government purchases, while wheat export prices rose following international trends, analysts said on Monday.

Last week the government acquired another 562,000 tonnes of grains, predominantly wheat. Until the end of the 2008/09 season it intends to buy a record amount of up to 20 mmt of grains.

SovEcon agricultural analysts believe the government may buy 14-19 million tonnes of grain with the nearly $3 billion it has put aside for the purchases.

So far, the government has formally purchased 3.74 million tonnes of grain of which only 1.5 million has reached the government-appointed silos, the Institute for Agricultural Market Studies (IKAR) said.

SovEcon believes that grain prices will continue rising firmly in the coming months, supported by the government purchases and a rise in demand from domestic millers, which have depleted their stocks ahead of extended New Year holidays.

IKAR said wheat export prices reached $175-$180 per tonne FOB Novorossiisk.

SovEcon said domestic wheat prices added 50 roubles ($1.80) per tonne. Maize prices added 100-200 roubles per tonne after the government announced plans to start buying maize from Dec. 22. at the top price of 4,000 roubles per tonne.

The inclusion of maize in the intervention list is bad news for exporters, who have tried building up maize stocks for shipments and offering 2,700-2,800 roubles per tonne including delivery to ports, SovEcon said.

IKAR said the remaining government-accredited grain storage space is getting very tight both in the south of Russia and in the Central Black Soil regions. To continue the purchases, the state will have to find more storage space in the near future.

"We are also concerned about longer-term consequences of the enormous volumes of the government intervention. We estimate that the target intervention volumes may be accumulated no earlier than in the end of April," IKAR said.

And at this very time farmers and commercial elevators in the European Russia usually start cleaning up their storage space for the new crop. But this season the best commercial storage space will be filled with the state-owned grain, it said.

Exports could be the best remedy, but shipment volumes are shrinking for the fourth month in a row, IKAR said.

"Some exporters are finding difficulties in honouring urgent contracts due to rising prices and continuing logistic difficulties," SovEcon said.

"There are still no news about the government support for exports, but taking into account huge sums dedicated to intervention purchases, the volume of state support is unlikely to be substantial."

SUNSEEDS RISING

Sunseed prices rose to $236-$254 per tonnes last week, IKAR said.

Domestic crude sunoil price slightly strengthened to $629-$639 per tonne, while the export price declined to $620 per ton, FOB Novorossiisk.

SovEcon said domestic sunoil added 175 roubles per tonne.

"However, the rise is unlikely to be stable due to competition from Ukraineis sunoil, the price of which is currently below $600 per tonne FOB," SovEcon said.

"Taking into account the competition and a record output of Russian sunoil in November of 310,000 tonnes we expect a downward trend to set in on the Russian market shortly."

Russian sugar prices rose by $10 percent to $550.5 per tonne in Krasnodar, said IKAR, which expects a further gradual price rise due to the new high import tariff.

Source: Reuters  |  #grain #cereal   |  Comments: 0   Views: 92

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