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IKAR in Mass Media

Russia's domestic wheat price drop slows due to weather, demand

18 марта 2013 года

MOSCOW, March 18 (Reuters) - A fall in Russia's domestic wheat prices - down since early February - has slowed as the winter grain crop appears in better condition than was expected and as demand revived, SovEcon agriculture analysts said on Monday.

The Russian wheat market has been stretched by last year's drought-stricken harvest, but prices have fallen 8 percent since early February due to sales from state intervention stocks.

"One of (the) possible price supportive factors is coming to nothing. The winter grain crop is not so bad, relatively, despite difficult weather conditions," SovEcon said in a note.

SovEcon raised its 2013 grain harvest forecast to between 84 million tonnes and 89 million tonnes last week and pegged winterkill crop losses at 9 percent, 0.5 percentage points below a multi-year average.

The wheat price drop is unlikely to stop in the coming weeks as large customers continue to rely on sales from the government stocks, it added.

Russia has sold about 2.3 million tonnes of grain from its stocks since the start of 2012/13 on July 1 and plans to sell an additional 2.1 million tonnes by the end of the season, slashing its stocks to 300,000 tonnes.

The average domestic EXW (ex-silo) price in European Russia for milling wheat and feed wheat declined by 125 roubles to 10,750 roubles and 10,450 roubles per tonne, respectively.

During the previous week the decline amounted to 200 roubles and was seen at 225-250 roubles per tonnes two weeks ago, SovEcon added.

Barley fell 125 roubles to 8,725 roubles per tonne, while maize (corn) prices were down 250 roubles at 8,675 roubles per tonne. Rye prices were seen at 8,000 roubles per tonne, down 50 roubles.

The Institute for Agricultural Market Studies (IKAR) quoted domestic wheat prices for third grade milling wheat in Russia's South at 10,760 roubles per tonne, down 40 roubles.

Prices for most grains in Russia's Urals and Siberia regions fell 100-150 roubles, while milling wheat prices were down 300 roubles thanks to supplies from Kazakhstan, SovEcon added.

Russia currently imports wheat from Kazakhstan which does not have to pay a 5 percent grain import duty. The Russian government plans to remove the tariff in April or May and until early July or August when the new crop is likely to arrive.

Russia's exportable surplus of wheat was exhausted several months ago, while some maize exports continue.

For the first two weeks of March the country exported less than 90,000 tonnes of grains, mainly maize. It was the lowest export volume for the first two weeks of any month since the start of the season on July 1, IKAR said, adding that this data excluded the long January holidays in Russia.

Maize export prices were flat at 8,300-8,700 roubles per tonne last week on a carriage-paid to (CPT) basis, SovEcon added. IKAR quoted maize export prices at $280 per tonne on a free-on-board basis.

Domestic prices for sunflower seeds were stable at 16,275 roubles per tonne, Sovecon said. IKAR pegged it at 16,160 roubles per tonne, down 40 roubles.

Export prices for crude sunflower oil were down $10 at $1,130 a tonne on a free-on-board basis, SovEcon added, while IKAR quoted domestic crude sunoil price at 33,780 roubles per tonne.

Russia's domestic sugar prices were down $12 at $696 per tonne in Russia's South region, IKAR added.

Source: Reuters  |  #grain   |  Comments: 0   Views: 59

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