April 17, 2012

 

Russia's wheat prices down on sluggish demand

 

 

Analysts said on Monday (Apr 16) that because of slow demand in the Black Sea port of Novorossiisk and to intervention sales from Russian state inventories, Russian wheat prices declined last week.

 

Russian wheat with 12.5% protein content declined to US$270 per tonne from US$276 per tonne on a free-on-board basis (FOB) in Novorossiisk, the Institute for Agricultural Market Studies (IKAR) said in a note.

 

SovEcon analysts wrote in a weekly market roundup that purchase prices of wheat with 11.5% protein content in Russian deep-water ports were stable at RUB7,400-7,600 (US$250-260) per tonne last week on a carriage-paid-to (CPT) basis.

 

In shallow-water ports, prices were also stable and were quoted at RUB7,000-7,100 (US$237-240) per tonne, it added.

 

"We observe very intensive physical export activities at shallow-water terminals of the Azov Sea, because of full freeing of navigation," IKAR added.

 

Novorossiisk, the main deep water port, will reduce grain shipments in April, because it has concluded existing wheat supply contracts to Egypt's main government wheat buyer, the General Authority for Supply Commodities (GASC), SovEcon said.

 

Russia has shipped its last vessel in line with GASC contracts last week, IKAR added. The Russian government sold 427,384 tonnes of grain in its first four intervention tenders this year, data from an exchange showed last week. The country may export between 0.5-1 million tonnes of grain from state inventories, and wheat will account for over half, according to a government source, traders and analysts.

 

Average domestic prices for third-grade milling wheat fell RUB25 (US$0.85) to RUB6,550 (US$221) per tonne ex-works in European Russia. Fourth-grade prices were stable at RUB6,525 (US$221) per tonne ex-works last week, SovEcon said.

 

Meanwhile, Russian wheat exports reached a record volume of more than 18.5 million tonnes in the period from July to the middle of April, IKAR said last week. By the end of the 2011-12 season the country's wheat exports could reach 20.5 million tonnes, it estimates.

 

For sunseeds, the domestic price index rose to US$394 per tonne from US$390, or to RUB11,640 (US$394) per tonne from RUB11,490 (US$388), IKAR said.

 

SovEcon pegged it at RUB11,625 (US$390) per tonne, up RUB175 (US$5.92). Export prices in shallow-water ports of North Caucasus rose to RUB12,500-12,700 (US$423-429) per tonne from RUB12,200 (US$412), it added.

 

Crude sunoil prices slightly strengthened to RUB33,260 (US$1,125) per tonne from RUB32,900 (US$1,118) per tonne, IKAR said. SovEcon recorded them at RUB33,775 (US$1,142) per tonne, up RUB275 (US$9.30).

 

Domestic white sugar prices fell to RUB25,500 (US$862) per tonne from RUB25,700 (US$873) per tonne, due to unusual sales activities of a major trader, IKAR said.