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IKAR in Mass Media

Russian wheat prices raise inflation fears, export question

24 сентября 2012 года

MOSCOW, Sept 24 (Reuters) - Russia's domestic wheat prices rose further in the last week with farmers holding onto stock, analysts said on Monday, keeping food inflation concerns in place and a question mark over grain export policy from the key global wheat supplier.

Russia's average domestic EXW (ex-silo) prices for third-grade and fourth-grade milling wheat stood at 8,750 roubles ($280) per tonne last week, up 300 roubles and 325 roubles respectively. During the previous week average prices rose 100-150 roubles, SovEcon agricultural analysts said.

"Grain supply remains generally low. Many farmers sold some grain to meet current cash needs and then took a wait-and-see position," SovEcon added in a note.

Russian Economy Minister Andrei Belousov put international grain markets on alert late last week when he said domestic prices for Russian third-class milling wheat could rise to 9,000 roubles ($290) per tonne by the end of the year, adding that if the trend continued the government may consider restricting grain exports.

Global benchmark wheat prices rose immediately after Belousov's comments, despite Deputy Prime Minister Arkady Dvorkovich and Agriculture ministry officials later saying there were no plans to curb grain exports.

Russia, one of the world's leading wheat exporters, is expected to cut its drought damaged 2012 grain harvest to 70 million tonnes from last year's 94 million tonnes, Prime Minister Dmitry Medvedev said on Monday.

Dmitry Rylko, head of the Institute for Agricultural Market Studies (IKAR), increased his forecast for Russia's 2012 grain harvest to 70 million tonnes from its previous forecast of 69 million tonnes.

Since the start of the 2012/13 marketing year, which began on July 1, Russia has exported 7 million tonnes of grain, including legumes, Rylko added in a note.

He raised his forecast for the exportable grain surplus to 12.2 million tonnes for 2012/13, of which 9.5 million tonnes is expected to be wheat, based on updated harvest data.

The Agriculture ministry previously expected Russia's 2012/13 exportable surplus to come in at 10-14 million tonnes, down sharply from last year's 27 million tonnes.

RISING PRICES

Russia's wheat export prices have been rising since June due to worsening crop conditions and forecasts and Moscow is also losing market share to other global suppliers,including France.

SovEcon quoted Black Sea export prices for wheat with 11.5 percent protein content at $348-355 per tonne last week, up from $342-350 per tonne, on free-on-board (FOB) basis. IKAR saw Russia's October FOB Black sea wheat future prices at $338 per tonne, up $4.

The average Russian price for fourth-grade milling wheat in deep-water ports rose to about 10,500 roubles ($340) per tonne last week from 9,900-10,000 roubles on a carriage-paid-to (CPT) basis, SovEcon said.

Wheat prices in shallow-water ports reached 9,600 roubles per tonne last week, up from 9,200-9,400 roubles, according to SovEcon.

Maize (corn) was estimated at 8,250 roubles ($270) per tonne last week in North Caucasus ports, down 250 roubles, SovEcon said. Maize prices were quoted at 8,500-8,600 roubles per tonne in deep-water ports last week, while it reached 8,200 roubles per tonne in shallow-water on a carriage-paid-to (CPT) basis.

For sunseeds, the price index for the new harvest rose by 385 roubles to 17,630 roubles per tonne, according to IKAR. SovEcon saw it at 18,350 roubles per tonne, up 1,825 roubles.

The crude sunoil price index was flat at 41,175 roubles per tonne, IKAR said. SovEcon saw domestic prices stable at 41,500 roubles per tonne, while export prices decreased to $1,200-1,220 per tonne from $1,250 per tonne.

The Soybean price index in the South of Russia rose to 19,000 roubles per tonne from 18,500 roubles per tonne, while rapeseed prices remain flat, IKAR added.

It pegged white sugar prices in the South of Russia at 20,800 roubles per tonne, down 200 roubles.

($1=31.0330 Russian roubles)

Source: Reuters  |  #grain   |  Comments: 0   Views: 76

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