April 12, 2011

Russian grain prices decline

Russian grain prices fell again last week following the fall in feed grain prices, as farmers awaited the sale of feed grain from government intervention stocks at low fixed prices.

"In accordance with the government order signed on March 24, feed barley price was set at RUB4,200 (US$149.6) per tonne and feed wheat at RUB4,550 (US$162.1)," SovEcon agricultural analysts said.

"In the case of barley, this price is substantially, by several thousand RUB, lower than the market price. In the case of wheat, the difference is not that big. Therefore barley prices may fall further," said SovEcon.

Barley prices lost RUB450 (US$0.16) last week, declining to RUB7,400 (US$263.6) per tonne in the European part of Russia. Corn prices also fell by RUB450 (US$0.16) to RUB8,050 (US$286.7) per tonne.

Feed wheat declined by RUB400 (US$14.2) to RUB5,300 (US$188.8) per tonne, while milling wheat and milling rye lost RUB200-300 (US$7.12-10.7).

Average wheat flour prices declined by RUB575 (US$20.5) last week to RUB10,075 (US$ 358.8) per tonne, SovEcon said.

The Institute for Agricultural Market Studies (IKAR) said that in the Southern Russia third-grade milling wheat prices fell to US$189 per tonne from US$198, fourth-grade to US$175 from US$185, feed wheat to US$168 from US$178. Feed barley declined to US$359 from US$271, corn to US$284 from US$292.

SovEcon expects demand for wheat to rise in the near future, which may result in a stabilisation of the whole market. "A change in the tone of various officials on the grain embargo may have a positive effect on prices," SovEcon said. "If previously all said that the ban will be extended, Prime Minister Vladimir Putin said on April 7 that Russia should restore its credibility as an exporter, although he did not give a date for the lifting of the ban."

Sunseed prices declined to US$642 per tonne from US$651, crude sunoil changed little to US$1,394 from US$1,396 per tonne, IKAR said.