IKAR in Mass Media

Russian wheat inches toward world prices on ban end

17 июня 2011 года

MOSCOW, May 30 (Reuters) - The impending end to Russia's ban on grain exports, officially announced on Saturday, pushed domestic wheat prices higher last week as exporters positioned to resume shipments, analysts said.

"In the North Caucasus exporters remain active buyers of wheat at domestic and port elevators, which is supporting a gradual increase in prices in the region by 50-100 roubles ($1.78-$3.56) over the week," SovEcon think tank said in a market comment.

SovEcon quoted third-grade milling wheat ex-works at 5,725 roubles ($204) per tonne on an offered basis in European Russia, showing the gap remains fairly wide between Russian wheat and global benchmarks.

Paris November wheat was trading at $251 per tonne, while CBOT July wheat stood just over $210 in tonnes.

Prime Minister Vladimir Putin announced on Saturday the ban would be lifted as of July 1. Russian producers are counting on cheap grain to return them to favour with traditional clients in the Middle East and North Africa.

Farm lobbies, analysts and traders had proposed a three-month moratorium on the ban to release a stock buildup and restore incentives to farmers to invest in next year's harvest without letting traders sack the country's reserves for export.

The government had been expected to enforce some kind of export barrier to avoid losing too much grain to foreign markets, which until last year relied on Russia for cheap wheat.

But Putin merely told his deputy for agriculture, Viktor Zubkov, to keep an eye on the condition of the country's farmers and made no mention of limitations.

In Russia's south, the country's key exporting region, stocks have built up in elevators and had been pressuring local prices for lack of export outlets.

As talk of a lifting of the ban intensified earlier this month, wheat volumes changed hands and traders began moving them to port, boosting prices in the south. Price moves were less dramatic last week, analysts said.

In that region prices for third grade milling wheat rose to $202 per tonne from $198 the previous week, the Institute for Agricultural Market Studies (IKAR) said in market report.

"In the past week South Russian prices have strengthened just on the rumours and hopes about July grain export opening. ... This week we expect a further South Russian price rise, which will spread like waves across the rest of Russia," IKAR said.

Fourth grade wheat rose to $194 per tonne from $187 in the same region, while feed wheat rose to $186 from $182. Corn prices have strengthened to $285 from $273 per tonne.

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

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