IKAR in Mass Media

Russia Losing Egypt Tender Shows High Price Is Eroding Sales

11 февраля 2019 года

(Bloomberg) -- As recently as last month Russian authorities were said to be seeking to curb soaring wheat exports amid surging domestic prices. Now the world’s biggest producer of the grain is facing a different problem -- slumping sales.

Russian wheat was shunned for a second time running on Friday in a tender by Egypt, the largest buyer of the grain, as cheaper American and European supplies proved more attractive. It was the fourth time in eight months that Russia missed out in a market it has typically dominated.

Russian wheat prices have climbed to a four-year high amid tighter supplies, exacerbated by a drought last year. Rapid shipments abroad earlier this season helped drive domestic prices to a record, prompting speculation of potential restrictions on exports.

But after a meeting with grain traders on Monday, the Agriculture Ministry said it doesn’t plan any restrictions on exports. It reiterated its outlook for grain shipments of 42 million tons this season, including 37 million tons of wheat.

“We have a different dilemma” now, said Dmitry Rylko, director general at the Institute for Agricultural Market Studies, known as IKAR. “Will exports just decline or will they decline sharply?”

Still, the U.S. Department of Agriculture on Friday raised its estimate for Russian wheat exports this season, and now sees shipments reaching 37 million tons. The country’s overseas sales have totaled 27.3 million tons so far this season, up 11 percent from a year earlier, the ministry said Monday.

Source: Bloomberg | #grain #prices | Comments: 0 Views: 50

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