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Russia's domestic wheat prices fall for first time since August

11 февраля 2013 года

MOSCOW, Feb 11 (Reuters) - Plans to expand grain sales from state intervention stocks drove down domestic wheat prices in European Russia for the first time since August, analysts said on Monday.

This week the government plans to extend the number of regions allowed to buy grain from state intervention stocks as it attempts to ease supply after a drought.

"Decrease in demand from (grain) processors was the main factor to stabilise the market," SovEcon agricultural analysts said in a note on Monday. "Many of them hope to buy cheaper grain from the intervention fund."

Since the start of this marketing year on July 1, the government has sold 1.68 million tonnes of grain but has so far failed to dampen prices. It will sell up to an additional 3 million tonnes this year.

A rise in grain imports from Kazakhstan was the second factor for the price decrease, SovEcon added.

Russia imported more grain between July and January this season than it has since the 2008/09 crop year as it attempts to cover domestic demand, the Institute for Agricultural Market Studies (IKAR) said.

The country imported 650,000 tonnes of grain in the first seven months of the crop year, which started on July 1, including 350,000 tonnes of Kazakh grain, Dmitry Rylko, the head of IKAR said in a note.

In coming weeks, grain prices in the European part of Russia are likely to be flat or even decrease slightly, SovEcon added.

The average domestic EXW (ex-silo) price in the European part of the country for third-grade and fourth-grade milling wheat declined by 25 roubles last week to reach 11,675 roubles ($390) per tonne and 11,650 roubles per tonne respectively, it said. Feed rye lost 25 roubles to reach 9,600 roubles per tonne.

IKAR pegged third-grade milling wheat in Russia's South at 11,760 roubles per tonne last week down from 11,900 per tonnes.

The drought slashed the harvest by a quarter and sent domestic wheat prices to record highs, making grain unattractive for export.

As a result, Russia shipped out 35,000 tonnes of grain in the first 10 days of February, the lowest volume for a 10-day period since the start of 2012/13 season, Rylko said.

Purchasing prices for maize (corn) were stable at 9,300-9,500 roubles a tonne on a carriage-paid-to (CPT) basis last week, SovEcon added.

As to oilseeds, domestic prices for sunflower seeds fell $1 to $560 a tonne, according to IKAR. SovEcon cited prices at 16,700 roubles a tonne, down 100 roubles.

Meanwhile, domestic soybean prices were up $16 at $626 per tonne, IKAR added.

Export prices for crude sunflower oil were down $20 last week at $1,148 a tonne on a free-on-board basis, IKAR added, while SovEcon quoted $1,175 per tonne, up $5.

Russia has exported 360,000 tonnes of sunflower oil since the start of this marketing year and till the end of January, down from 452,000 tonnes in the same period last year, IKAR said. The country increased palm oil imports to 361,000 tonnes for the same period from 330,000 tonnes, it added.

Sugar prices were down $10 at $719 a tonne in Russia's south, IKAR said.

($1 = 30.1315 Russian roubles)

Source: Reuters  |  #grain   |  Comments: 0   Views: 37

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