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IKAR in Mass Media

GASC tender sets bar for Russian wheat prices-IKAR

13 августа 2012 года

MOSCOW, Aug 13 (Reuters) - The victory of Russian wheat at the first Egyptian state tender in the new marketing season at the weekend has set the market higher for domestic prices, leading Russian grain analysts said on Monday.

Egypt's General Authority for Supply Commodities (GASC) agreed to buy 60,000 tonnes of Russian wheat from Glencore at $316.47 per tonne with freight costs of $10.90 per tonne and 60,000 tonnes of Russian wheat from Soyuz at $316.47 per tonne with freight costs of $10.73 per tonne.

This victory "opens new opportunities for Russian wheat on the Middle Eastern markets and confirms new FOB (a free on board) Black Sea price levels of $312-316 per tonne", Dmitry Rylko, head of the Institute for Agricultural Market Studies (IKAR), said in a note on Monday.

IKAR said prices for export wheat prices were estimated at $313 per tonne last week, up from $307 per tonne, free-on-board (FOB) at the Black Sea port of Novorossiisk. SovEcon consultancy pegged last week's FOB levels at $310-315 per tonne.

Global wheat prices have dropped for the last three weeks but are up more than 40 percent since mid-June.

Russia's wheat prices also rose but more slowly - by about 30 percent - making them more competitive on world markets and spurring Russian exportS, adding to concerns about possible export limits, SovEcon said.

"The maximum levels of export allowed by Russia's supply demand balance could be reached much sooner than expected based on official forecasts for the harvest and exports," SovEcon added. "In this case, very interesting developments are possible for Russian market participants."

Russia's exportable surplus is officially forecast to fall to 10-12 million tonnes of grain in the current marketing year, when producers across the country have been plagued by episodic drought, after record total exports of 28 million tonnes in the previous season.

Analysts have forecasts for August exports in a 2.5-3.5 million tonne range, up from 2.1 million tonnes in July.

Russian Deputy Prime Minister Arkady Dvorkovich said last week that Russia had no grounds to ban grain exports but did not rule out protective export tariffs after the end of the 2012 calendar year.

The Russian government also may sell a part of its 5-million tonnes grain intervention stocks to cool down high domestic prices, which were down for a fist week after ten weeks of gain.

Russia's average domestic EXW (ex-silo) price for third-grade milling wheat declined by 50 roubles to 8,325 roubles ($260) per tonne, while the fourth-grade price lost 25 roubles to 8,275 roubles per tonne, the SovEcon consultancy said in a note on Monday.

The price of fourth-grade milling wheat in deep-water ports last week was stable at 9,600-9,800 roubles per tonne on a carriage-paid-to (CPT) basis, according to SovEcon.

Demand in Russia's shallow water ports was poor because of the Islamic holy month of Ramadan and forced price decrease to $272 per tonne from $275 per tonne, IKAR said. SovEcon pegged it at 8,700-8,850 roubles ($270-280) per tonne.

Sugar prices in southern Russia decreased to 24,300 roubles per tonne from 25,200 roubles, which in dollars was a fall to $772 from $776, IKAR added.

($1 = 31.8260 Russian roubles)

Source: Reuters  |  #grain   |  Comments: 0   Views: 71

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