• IKAR in Mass Media

Where the margin is 2025
July 17-18, Moscow

 

 → IKAR in Mass Media → #740

IKAR in Mass Media

Russia's state grain restocking campaign to miss target-analysts

24 сентября 2013 года

MOSCOW, Sept 24 (Reuters) - High market prices mean Russia, one of the world's biggest wheat exporters, is unlikely to buy the six million tonnes of grain it is targeting from the domestic market in 2013/14 to rebuild stocks, analysts said on Tuesday.

Russia's move to rebuild stocks depleted by last year's drought has been one of the key factors supporting domestic prices during this season, together with the lack of high quality wheat and a delayed harvest.

The purchases, expected to start in the first ten days of October, are aimed at securing up to 6 million tonnes of grains during the 2013/14 marketing year which started on July 1.

"We believe that this estimate is quite overstated," SovEcon agriculture analysts said in a note. "Market prices for many regions and commodities are likely to be higher than prices for (government) interventions."

SovEcon believes the government will be able to buy between 2 million and 3 million tonnes of grains during the first half of the season and will find it hard to acquire an additional 3 million tonnes during January-June 2014.

Up to 3 million tonnes is a more likely target for the whole restocking campaign, Vladimir Petrichenko, the head of the ProZerno consultancy, said. He expects a lack of high quality wheat, which the government usually targets, will also limit buying.

The programme will, however, continue supporting grain prices on the domestic market as a whole, and especially in Russian regions which are far from export routes - such as the Urals and Siberia, analysts added.

The government is ready to pay up to 6,250 roubles ($200) per tonne for third-class wheat in the Asian part of Russia, a level which looks quite competitive now, analysts added.

Prices for third-class wheat fell to 5,550 roubles per tonne last week from 6,000 roubles a week earlier in Western Siberia as the new harvest was approaching the market, SovEcon said.

Government maximum prices for grain interventions in roubles per tonne:

            Wheat   European part of     Asian part of
                              Russia            Russia
      Third-class              6,550             6,250
     Fourth-class              6,300             6,050
      Fifth-class              5,950             5,700

Russia hopes to increase its wheat harvest by a third to about 50 million tonnes in 2013 and has already threshed 45.9 million tonnes as of Sept. 23. The harvest has been delayed by rain in some regions, which has also put the winter grains sowing campaign behind schedule.

Russian prices for third-class wheat were flat at 8,100-8,400 roubles per tonne in deep-water ports on a carriage paid-to basis (CPT) last week, according to SovEcon.

Prices for fourth-class wheat were stable at 7,500-7,800 roubles per tonne in Novorossiisk and down 100 roubles at 7,200-7,300 roubles per tonne in shallow-water ports on a CPT basis, it added.

Meanwhile, domestic prices for new crop sunflower seeds continued to decline and were quoted at 11,200 roubles per tonne, down 200 roubles on a CPT basis in the North Caucasus region, SovEcon said.

Export prices for sunflower oil were flat at $850-860 per tonne on a free-on-board (FOB) basis in the Black Sea, it added.

($1 = 31.7992 Russian roubles)

Source: Reuters  |  #grain   |  Comments: 0   Views: 56

There are no comments yet. Be the first!

Only authorized users can comment.