IKAR in Mass Media

Russian wheat prices rise on exporters' demand

20 мая 2010 года

MOSCOW, May 17 (Reuters) - Russian wheat prices rose last week mainly on demand from exporters, who do not have sufficient cereals to honour contracts rapidly, analysts said on Monday. Export prices strengthened by $1 to $176 per tonne of wheat with protein content of 11.5 percent and bug damage of up to 1 percent and to $181 for wheat with protein content of 12.5 percent, both FOB Novorossiisk, the Institute for Agricultural Market Studies (IKAR) said in a weekly note.

SovEcon agricultural analysts said in its weekly note that bid prices for fourth-grade wheat rose by 100 roubles ($3.32) to 4,900-5,000 roubles in Novorossiisk and by 50 roubles to 4,350-4,450 roubles at shallow water ports.

"Supply of quality grain in the main export-oriented regions of North Caucasus and Black Soil is rather limited," it said.

SovEcon believes that urgent contracts will keep warming the market in the near future.

However, Russian wheat is losing its competitiveness to wheat coming from the European Union, which is becoming cheaper because of the weak euro. This is forcing some exporters to wind up their export programmes.

SovEcon said export prices had pushed up offer prices in European Russia by 25 roubles for third-grade wheat and by 75 roubles for fourth-grade wheat to an average of 3,750 roubles per tonne for both cereals.

IKAR said feed barley export prices remained basically unchanged at $138-$140 per tonne, FOB Novorossiisk.

SovEcon said that domestic rye prices fell by 50 roubles per tonne to 1,600 roubles, which may raise demand from animal feed producers and distillers.

IKAR said the spring sowing campaign is lagging behind last year's, which raises serious doubts that the target of 22 million hectares set by the Agriculture Ministry for this year's sowing is achievable.

Producers spend a lot of effort resowing areas on which grains were lost due to winter frosts, which affects the progress of the spring planting operations, it added.

Sunseeds and sunoil prices kept declining last week, SovEcon said. If export prices for sunoil remain at the current level of $840 per tonne FOB, the domestic market may reach stability shortly.

White sugar prices fell to $703 per tonne from $719 and to 21,000 roubles from 21,800 roubles, IKAR said.

Source: Reuters | #grain | Comments: 0 Views: 38

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