IKAR in Mass Media

Russia grain prices jump on drought, low supply

10 сентября 2010 года

MOSCOW, July 26 (Reuters) - Russian grain prices shot up last week on advancing drought and farmers' reluctance to sell on the rising market, which raised competition for grain between exporters and feed makers and millers, analysts said on Monday.

FOB Black Sea prices for ordinary wheat rose to over $210 per tonne last week from $198 a week before, the Institute for Agricultural Market Studies (IKAR) said in a weekly note.

FOB barley prices at shallow water ports strengthened to $125 per tonne from $112, although the market was not active.

"The rise in grain prices reached record levels last week," SovEcon agricultural analysts said in a weekly note.

Exporters raised bid prices for wheat by 500 roubles-600 roubles ($16.49-$19.78) to 5,700 roubles-5,800 roubles per tonne including delivery to (CPT) Novorossiisk, while in shallow water ports prices rose to 5,000 roubles per tonne from 4,400-4,600.

SovEcon said that last week processors were actively trying to buy grain, while stock holders were reluctant to sell with some even declining to honour earlier signed supply contracts.

IKAR said prices in southern Russia rose by some 100 roubles last week to 5,100 roubles for third-grade milling wheat and to 4,900 roubles for fourth-grade milling wheat. SovEcon said fifth-grade feed wheat led the price rally on the domestic market last week, its average price rising by 950 roubles per tonne to 4,450 roubles per tonne.

Milling wheat rose by 600 roubles per tonne to 4,850 roubles for third-grade wheat and to 4,825 roubles for fourth-grade wheat, SovEcon said.

It believes that the government plans to start selling grain from its stocks may contain prices, which have already exceeded prices at which the government had bought the grain.

DROUGHT ADVANCES

The Agriculture Ministry said late on Friday that by July 22 drought had killed crops on 10 million hectares, without specifying losses of grain, which had been sown on 43.6 million hectares.

Farmers had harvested 25.3 million tonnes of grain by July 22, up 2.4 million from the same date a year ago. Wheat crop was 19 million tonnes, up 1 million tonnes from a year-ago and barley crop rose by 0.2 million tonnes to 2.7 million tonnes.

The bulk of the grain comes from regions largely unaffected by the drought.

Grain exports in the first 20 days of July exceeded 1 million tonnes, including 0.8 million tonnes of wheat, which is much higher than the 650,000 tonnes exported by the same time a year ago, in spite of acute competition between exporters and domestic consumers, IKAR said.

Source: Reuters | #grain | Comments: 0 Views: 37

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