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IKAR in Mass Media

Russian wheat prices decline on weak demand, competition

23 марта 2012 года

MOSCOW, March 23 (Reuters) - Russian wheat prices declined further last week on the back of weak demand and competition from neighbouring Kazakhstan, analysts said on Monday.

"Traders complain about inactive demand and abundance of very cheap Kazakh wheat," the Institute for Agricultural Market Studies (IKAR) said in a note.

Russian wheat with 12.5 percent protein content declined to $273 per tonne from $279 on a free-on-board basis (FOB) in the port of Novorossiisk, IKAR added.

U.S. CBOT May wheat slipped 0.38 percent to $6.51-3/4 per bushel on Monday. The most active May contract in western Europe closed at 210.50 euros ($280) a tonne on Friday evening.

Kazakh wheat exports are subsidisised to the tune of $40 per tonne, sharply reducing the cost basis for exporters of Kazakh wheat via Russian ports.

Traders say Russian deepwater ports are gradually switching over to handling Kazakh wheat as Russian volumes grow scarce and fail to compete on price.

SovEcon analysts wrote in a weekly market roundup that fourth-grade wheat purchase prices in Russian deep-water ports declined to 7,800 roubles ($270) per tonne last week from 7,900-8,100 roubles per tonne on a carriage-paid-to (CPT) basis.

Towards the end of the week some buyers were pegging prices around 7,500 roubles ($260) per tonne, it added.

As of mid-March Russia exported 21.2 million tonnes of grains, excluding legumes, of which wheat accounted 17,26 million tonnes. With legumes, he said, 21,81 million tonnes of grains including 590,000 tonnes of legumes, which were exported from July to January, IKAR said.

The pace of Russian grain exports will be supported by shallow-water ports, which are resuming normal export activities as the remaining ice melts.

Prices in the shallow-water ports declined to 6,600 roubles per tonne last week, down from 6,700-6,800 per tonne, SovEcon said, adding that the ports were re ceiving no n-ice class ve ssels a s of Mar ch 23.

Russian average domestic prices for third-grade milling wheat lost 25 roubles to reach 6,675 roubles per tonne ex-works in European Russia. Fourth-grade prices were at 6,625 roubles per tonne ex-works last week, down 50 roubles, SovEcon said.

Russia is due to start sales from government grain stocks in the course of market interventions, which could boost trade activity.

The country can export up to 1.5 million tonnes of grain to be sold from intervention stocks in the European part of the country during planned sales by the state, a government source told Reuters in early March.

For sunseeds, the domestic price index rose to $382 per tonne from $376 per tonne, IKAR said. SovEcon pegged it at 11,250 roubles ($380) per tonne, up 75 roubles.

"Domestic sunseed holders hope to resume sunseed export activities after the full opening of navigation. However, the purchasing policies of domestic crushers will remain the main driver," IKAR believes.

Crude sunoil prices slightly strengthened to $1,089 per tonne from $1,061, IKAR said. SovEcon recorded them at 32,675 roubles per tonne, up 500 roubles.

Domestic white sugar prices increased slightly to 25,550 roubles per tonne from 25,400 and in dollar terms reached $874 per tonne, up $15, IKAR said.

Source: Reuters  |  #grain   |  Comments: 0   Views: 33

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