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AWP-Russian grain prices fall on low seasonal demand

25 августа 2009 года

MOSCOW, Aug 24 (Reuters) - Russian grain prices have fallen by 2-3 percent in the past week as a seasonal drop in demand, including reduced purchases from Egypt and other Muslim countries, weighed on export demand, analysts said on Monday.

Russian wheat prices will have to drop further before becoming attractive in the international market, they said.

Export prices for ordinary milling wheat from the Black Sea port of Novorossiisk fell to $167 a tonne, FOB, the Institute for Agricultural Market Studies (IKAR) said. The fasting month of Ramadan has cut demand in the Middle East and North Africa.

Moscow-based analyst group SovEcon said exporters were purchasing fourth-grade milling wheat at 4,700-4,800 roubles a tonne for shipment from Novorossiisk and 4,300-4,500 roubles a tonne from shallow-water ports.

Russian suppliers won only 30,000 tonnes of the latest Egyptian wheat tender on Aug. 19, when state wheat buyer GASC snapped up 270,000 tonnes of mainly French, Canadian and U.S. wheat.

"The results of the tender confirm that Russian wheat is uncompetitive on the world market," SovEcon said, noting that Russian wheat sold at $172 a tonne versus $169.50 for French wheat and between $162 and $165 a tonne for North American.

"We don't expect the market for (Russian) exporters to improve in the short term," SovEcon said.

Feed barley forward prices fell to $125-130 a tonne, FOB Novorossiisk, from $132 a week ago, IKAR said.

The Russian government is expected soon to announce the start date for its next round of intervention purchases. IKAR said interventions were unlikely before mid-September, because "a number of bureaucratic problems must be solved".

IKAR forecasts August grain export volumes will decline to about 1.7 million tonnes, from 2.3 million tonnes in the same month last year, as exports remain unprofitable for traders.

Crude sunoil export prices fell by about $20 in the last week to $740 a tonne, continuing a downturn that followed a speculative increase in vegetable oil prices, IKAR said.

Domestic white sugar prices fell to 23,700 roubles from 24,000 roubles, although in dollar terms prices rose to $750 a tonne from $746, IKAR said.

"The market expects some decline in prices with the appearance of new beet sugar in the next few weeks, although everybody agrees that the seasonal price fall will not be as big as usual," IKAR said.

Source: Reuters  |  #grain   |  Comments: 0   Views: 54

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