IKAR in Mass Media

Russia grain prices barely in check after interventions

16 марта 2011 года

MOSCOW, March 1 (Reuters) - Russia's government barely restrained grain prices through intervention tenders where prices have been rising steadily toward market levels, and some analysts said prices could yet jump.

Russia banned grain exports and announced the sale of state grain stocks to cool domestic prices after a drought slashed Russia's harvest to 61 million tonnes and threatened to send inflation, one of the economy's most stubborn economic problems, out of control.

There has been a "definite trend down of market prices on European Russia (grains) because of growing pressure of intervention," the Institute for Agricultural Market Studies said in a report.

"Paradoxically, intervention auction prices have slightly grown, so that both market and intervention prices are moving (towards) each other."

In Russia's relatively well supplied south, market prices for third grade milling wheat dropped by $6 to $230 per tonne, IKAR said.

But across European Russia, prices falls were shallower. All grains, with the exception of milling rye, fell by $0.87-$2.60 ex-works on an offered basis, the SovEcon think tank said.

"The main factor behind market declines were intervention trade and expectations for direct distribution of grain to the regions," SovEcon said.

Russia's government said last week it would continue to sell milling grains at intervention tenders, but expand direct sales of feed grains, in greater shortage than milling grain, to drought-hit regions.

It also sold far more feed grain than initially expected, SovEcon said.

Only prices for feed corn rose in the south last week, IKAR said, pegging prices at $318, higher on the week by $8.

The sales could be fraught with bureaucracy, however, and some buyers, now delaying their purchases in hope of cheap grain, could be caught out, SovEcon said.

"On the whole, we expect a downtrend on most grains in the near term," SovEcon said in a report. "However, the probability of a price spike is rising.

"The reason for it could be a sharp increase in buying when consumers run out of stocks and realise that they will not receive cheap grain as quickly as they thought."

High supplies pressured crude sunoil prices. In the south, IKAR said, prices fell to $1558 from $1581, while across European Russia prices for sunseed and crude sunoil fell by $2.60-$3.46 on an offered basis, SovEcon said.

"A pronounced downtrend in world prices for the oilseed complex, together with expectations of a high crop of soybeans in South America, put a question mark over further gains in oils and sunseeds in Russia," SovEcon said.

Source: Reuters | #grain | Comments: 0 Views: 42

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