April 26, 2011

Russian grain prices keep sliding on stock sales

The grain prices of Russia continued to decline in the previous week but at a slower rate than the week before, as the government started selling its intervention stocks, analysts said on Monday (Apr 25).

The state grain trader, United Grain Co, is actively signing agreements with regions hit by last year's drought to sell some 1.4 million tonnes of grain at a low fixed price, the company said.

Third-grade milling wheat price declined to US$185 per tonne from US$190 in southern Russia, fourth-grade to US$174 from US$176 and feed wheat to US$167 from US$169, the Institute for Agricultural Market Studies said in a weekly note.

It said feed barley price was unchanged at US$249 per tonne, while corn remained at US$277 per tonne.

SovEcon agricultural analysts said in their note that in the European Russia average barley EXW offer prices declined by RUB350 (US$12.53) per tonne to RUB7,050 (US$252.33) per tonne. It fell by RUB450 per tonne in the previous week.

SovEcon believes that UGC will have difficulties in selling all the grain in accordance with government orders.

"On the falling market, grain, mainly feed wheat, becomes less attractive," it said. "We may expect therefore that not all signed contracts will be fulfilled."

Sunseed prices increased slightly in dollar terms to US$641 per tonne from US$638, although they declined in roubles. Sunoil rose to US$1,401 per tonne from US$1,398 but was unchanged in rouble terms, IKAR said, adding there was little trade last week.