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IKAR in Mass Media

Russia wheat price flat in south on export uncertainty

17 июня 2011 года

MOSCOW, June 14 (Reuters) - A dramatic rise in wheat prices in Russia's south, its key export region, all but ended last week weighed down by uncertainty about the government's intentions to impose protective export duties.

Prices for third grade milling wheat in Russia's South were pegged at $225, unchanged on the week, while fourth grade was flat at $215 per tonne, the Institute for Agricultural Market Studies (IKAR) said.

"Exporters complain about very low demand, as buyers are not firm yet about Russia's exporting intentions," IKAR said. "The bins are very busy, while end demand is lacking, or very weak."

With an outright ban on export due to expire in just over two weeks, Russia's government has adopted a wait-and-see stance on new export regulation, which is likely to come in the form of protective export tariffs.

But a newspaper report said last week that the government in theory backed the idea of a sliding scale of duties favoured by the head of the central bank, who has said the lifting of the export ban is the single biggest inflationary threat to Russia.

"Government bureaucrats continue to fear a rapid increase in grain prices and talk about a possible introduction of export duties, likely floating ones, which could limit this rise," the SovEcon think tank said.

"In this context of uncertainty several exporters have suspended buying, which brought about the cooling of the market."

Prices in the south rose by $25-$35 in the days following Prime Minister Vladimir Putin's announcement that the grain export ban, imposed in August last year after a drought destroyed a third of Russia's crop, would end on July 1.

Traders are closely watching price moves in Russia's traditional export markets of the Middle East and North Africa. Ukraine won a Lebanese tender in early June by undercutting Russia, which had hoped to win back clients with the offer of cheap grain.

More recently, Tunisia bought 25,000 tonnes of wheat from Bunge at $330 on a delivered basis.

"According to most recent result of the Tunisia tender, deep water the FOB 11.5 percent protein wheat price may be determined as $295-$303 per tonne," IKAR said, adding that prices in shallow water ports were as much as $50 below FOB levels in deep-water ports.

MAXIMUM EXPORTS

Prices in the rest of Russia followed the south higher, but Russian prices remain far below world levels, even after declines following Russia's decision to lift the ban and the arrival of rains in European growing regions.

In Paris, November milling wheat fell 4.25 euros to 219.75 euros ($317.7) on Tuesday.

In European Russia, third grade milling wheat rose last week on average by 225 roubles to 6,350 roubles ($227.9) per tonne offered ex-works, after a gain of 400 roubles per tonne the week earlier.

Fourth grade milling wheat rose by 175 roubles to 6,200 roubles ($222.5) offered ex-works in European Russia, SovEcon said.

"For the world wheat market the possible restrictions on Russian exports are obviously bullish. But in reality they could support the market only if it turns out that export, subject to limitations, less than expected," SovEcon said.

"In the short term they appear bearish, as the uncertainty around the introduction of tariffs may cause Russian traders to export the maximum possible volume as soon as shipments re-open on July 1."

Russia may export around 8 million tonnes of grain in July-September, although its exportable surplus is expected to be significantly higher, the head of the Russian main grain industry lobby said on Tuesday.

Source: Reuters  |  #grain   |  Comments: 0   Views: 68

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