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Russia's domestic wheat price drop expected to slow soon

04 марта 2013 года

MOSCOW, March 4 (Reuters) - A fall in Russia's domestic wheat prices, down for a fifth week last week, is expected to slow in March due to reviving demand from large consumers.

Russia, normally one of the world's major wheat exporters, was hit by a drought last year, which slashed its harvest by one third, depleted its stocks and sent wheat prices higher from August until early February.

Since then, grain sales by the government from its intervention stocks have started to bring down prices.

"It is too early to speak about the end of the downward trend, but we may see it slow down relatively soon," SovEcon agricultural analysts said in a note.

"After a noticeable decrease, some market prices are getting closer to the level of intervention sales," SovEcon said. "On the other hand, large-scale consumer purchases are likely to restart in March."

The average domestic EXW (ex-silo) price in the European part of Russia for milling wheat declined by 275 roubles to 11,075 roubles ($360) per tonne last week, SovEcon said.

Feed wheat lost 225 roubles to reach 10,775 roubles per tonne last week, while barley fell 225 roubles to 9,025 roubles per tonne. Maize (corn) prices were down 250 roubles at 9,075 roubles per tonne.

The Russian government expanded the list of the regions allowed to buy grain from its stocks in February. Since the start of this marketing year on July 1, it has sold 2.07 million tonnes of grain. For the whole season to end-June 2013, its sales are expected to reach about 4.5 million tonnes.

Russia's exportable surplus of wheat was exhausted several months ago. The country's February grain exports amounted to about 310,000 tonnes, not counting legumes, and was covered mainly by maize shipments, the Institute for Agricultural Market Studies (IKAR) said.

Maize export prices fell to 8,400-8,800 roubles per tonne last week from 8,700-9,100 roubles per tonne on a carriage-paid to (CPT) basis, SovEcon added.

Domestic prices for sunflower seeds fell 125 roubles to 16,375 roubles per tonne, it said. IKAR pegged it at $536 per tonne, down $12.

Export prices for crude sunflower oil were down $25 at $1,150 a tonne on a free-on-board basis, according to SovEcon, while IKAR quoted it at $1,108 per tonne, down $26.

Sugar prices were down $3 at $698 a tonne in Russia's south, IKAR said.

($1 = 30.7362 Russian roubles)

Source: Reuters | #grain | Comments: 0 Views: 55

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