March 13, 2012

 

Russia's wheat export prices relax as competition rises

 

 

Following Egypt's purchased of US origin in a tender as well as on rising competition from neighbouring Kazakhstan, Russian export prices for benchmark wheat eased slightly last week, analysts said on Monday (Mar 12).

 

Russian wheat with 12.5% protein content slightly weakened to US$281 per tonne from US$283 per tonne on a free-on-board basis (FOB) in the port of Novorossiisk, the Institute for Agricultural Market Studies (IKAR) said.

 

SovEcon analysts wrote in a weekly market roundup that fourth-grade wheat purchasing prices in Russian deep-water ports declined to RUB8,000-8,200 (US$270-280) per tonne last week from RUB8,200-8,400 (US$280-US$290) per tonne on a carriage paid to (CPT) basis.

 

"Russian wheat prices in ports will need to decline by at least RUB400-600 (US$13.54-20.31) per tonne to restore its competitive advantage over US wheat if the rouble remains around current levels against the dollar," SovEcon said.

 

Egypt, the world's largest wheat importer, has bought 60,000 tonnes of US soft red winter wheat for April 21-30 shipment on a free on board basis, the main government wheat buyer said last week.

 

Iran's state grains agency the Government Trading Corporation of Iran (GTC) has bought at least 300,000 tonnes of wheat last week largely from Russia and Kazakhstan.

 

As of the beginning of March, Russia had exported a record 21.5 million tonnes of grains, including legumes, of which wheat accounted for 17.2 million tonnes, IKAR said.

 

US CBOT May wheat slipped 0.23% to US$6.41-3/4 per bushel on Monday, pressured by favourable weather for hard red winter wheat across areas of the US Plains. The most active May contract in Western Europe was at EUR208.75 (US$275) a tonne.

 

Russian average domestic prices for third-grade milling wheat added RUB25 (US$0.85) and reached RUB6,750 (US$230) per tonne ex-works in European Russia. Fourth-grade prices were flat at RUB6,700 (US$230) per tonne ex-works last week, SovEcon said.

 

For sunseeds, the purchase price index was unchanged at about RUB11,000 (US$372) per tonne, IKAR said. SovEcon pegged it at RUB11,075 (US$375) per tonne, up RUB100 (US$3.39).

 

Crude sunoil prices remained at RUB30,900 (US$1,047) per tonne, IKAR said, while SovEcon saw it at RUB32,000 (US$1,084) per tonne, up RUB150 (US$5.08). As of beginning of March, Russia exported a record 135,000 tonnes of sunseeds and 535,000 tonnes of sunoil, IKAR added.

 

Domestic white sugar prices strengthened to RYB25,350 roubles (US$859) per tonne from RUB25,100 (US$851) and declined in dollar terms to US$855 per tonne from US$857, IKAR said, adding that sugar beet processing has fully finished, while processing of raw sugar will start in a couple of weeks.