IKAR in Mass Media

Russia Loses Grain Tenders to Competition as Wheat Crop Ending

23 марта 2012 года

March 20 (Bloomberg) -- Russia's wheat exporters are losing out to U.S. and Canadian traders as the country's crop nears an end and domestic grain use competes with overseas deliveries.

Egypt, the world's biggest wheat importer, hasn't bought Russian grain since Jan. 13. Russian grain traders stopped bidding in international tenders after Feb. 11 as dwindling stockpiles and record exports in the season started July 1 pushed domestic prices higher, according to Moscow researchers Institute for Agricultural Market Studies and OOO ProZerno.

``We don't take part in international tenders,'' said Oleg Sukhanov, head of the markets analysis department at the Moscow-based institute known as Ikar. Most of the exportable surplus in the south of the country has been shipped, Sukhanov said.

Wheat prices fell 2.9 percent in Chicago yesterday after Viktor Zubkov, first deputy prime minister, said Russia won't need to limit grain exports. Prices have dropped 11 percent in the past year on rising world production and slowing demand for U.S. supplies.

Russian farmers' wheat stocks dropped 7.4 percent to about 7 million metric tons by the end of February from a year earlier, Russia's Grain Union said on its website, citing the state statistics service.

Most of the stocks are in the Siberia and Volga areas, it said. Wheat stocks in Russia's Southern federal district, which is the main exporting area, dropped almost 55 percent over the same period to 750,000 tons, the Grain Union said. The stocks don't include data from small private farmers who accounted for about 20 percent of Russia's grain output last year.

Poultry Competition

Exporters are facing competition from local millers and poultry producers who are paying a ``good price'' for grain as stockpiles fall, Sukhanov said.

Russia has exported a record 22 million tons of grain this season and the government forecasts exports may reach 27 million tons by the end of the season on June 30, according to Zubkov. The country may ship 20.5 million tons of wheat this marketing year, making it the third-biggest exporter after the U.S. and Australia, the U.S. Department of Agriculture estimates.

Russian fourth-grade milling wheat with 12.5 protein content, the main export variety, is $279 to $280 a ton on a free-on-board basis at the port of Novorossiysk, Sukhanov said. Last week Egypt bought 120,000 tons of U.S. and Canadian soft red winter wheat for $261.50 a ton and $263.50 a ton, respectively.

``There is possibility that wheat of North American origin will maintain its dominance till the end of the season,'' Sukhanov said.

Source: Bloomberg | #grain | Comments: 0 Views: 91

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