IKAR in Mass Media

Russian grain prices decline as stocks grow

13 мая 2008 года

MOSCOW, April 21 (Reuters) - Russian grain prices declined last week as domestic stocks grew, a move interpreted by some analysts as the beginning of a stronger downward trend, but by others as a temporary correction.

"The downward trend, which was fragile in the previous week, strengthened last week," SovEcon agricultural analysts said. "The decline was rather slow, but we believe that a change in the trend is an accomplished fact."

SovEcon based its estimate on the volumes of carry-over grain stocks. As of Jan. 1, stocks were a historically low 29.9 million tonnes, but export curbs have ensured little of this grain has left Russia. Domestic supply of 29 million tonnes in January-June was the highest in the last five years, it said.

The Institute for Agricultural Market Studies (IKAR) said the domestic wheat market had witnessed a "further correction down".

Third-grade wheat lost $3, declining to $402 per tonne in the Central Black Soil region, fourth-grade wheat fell by $5 to $376 per tonne, while feed wheat rose slightly to $368 due to substantial purchases in the central Tambov region. Feed barley prices were unchanged, IKAR said.

SovEcon said feed barley declined by 50-100 roubles ($2.24-$4.28) per tonne, almost by the same amount as milling wheat, while feed wheat prices were largely unchanged.

It said milling rye rose by some 100 roubles per tonne.

SovEcon said sunseed offer prices rose last week, with low market activity and supply and demand practically absent.

But IKAR said sunseed prices stopped rising, reaching a level of $980-$985 per tonne. "Few processors can afford to buy at such a high price," IKAR said. SovEcon said crude sunoil prices declined by around 75 roubles per tonne for the first time since March 2007.

"Taking into account current price levels, we may expect current sunseed prices to be the highest in the current marketing year," it said.

IKAR said crude sunseed oil had reached a level of $2,120-$2,130 and stopped rising. It estimated sunoil FOB export prices at $1,750 per tonne, making exports uncompetitive in comparison with domestic utilisation.

From the beginning of the season, net Russian exports of sunseeds amounted to 16,000 tonnes, while net sunseed oil exports were 109,000 tonnes (with 195,000 tonnes of exports and 85,000 tonnes of imports).

To manage the tough domestic oilseed balance, Russia has imported a record 450,000 tonnes of palm oil from the beginning of the season, IKAR said.

White sugar prices were unchanged, with the market still expecting an upward movement in coming weeks, it said.

Source: Reuters | #grain | Comments: 0 Views: 39

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