July 13, 2010

Russian grain prices increase on drought, world prices

Grain prices in Russia rose amid rising world prices and a drought in many key-producing regions of the country with the sole exception of Siberia, according to analysts.

The main news for exporters was the latest Egyptian tender, at which main government buyer purchased 60,000 tonnes of Russian wheat at US$183.5 per tonne, up US$18.5 from the previous tender, SovEcon agricultural analysts said.

Following the tender Russian ordinary wheat with protein content of 11.5 % and bug damage of up to 1% rose to US$181 per tonne from US$167, FOB Novorossiisk, the Institute for Agricultural Market Studies (IKAR) said in a weekly note.

The same cereal with bug damage of up to 1.5% was priced at around US$175, up almost US$15.

Exporters' bid prices for fourth-grade (ordinary) wheat rose by RUB200-RUB300 (US$6.48-US$9.71) per tonne including delivery to (CPT) Black Sea deep water ports and to RUB4,200-RUB4,300 (US$135.99-US$139.23) per tonne to shallow water ports, SovEcon said.

Domestic prices rose in all regions save for Siberia, the region which has big stocks and had not been hit by drought, it said.

Average wheat prices rose by RUB100-RUB150 (US$3.24-US$4.86) per tonne, SovEcon said.

In the south of Russia, fourth-grade wheat prices rose to RUB3,900-RUB4,200 (US$126.28-US$135.99) per tonne from RUB3,500-RUB3,800 (US$113.33-US$123.04), IKAR said.

According to a preliminary estimate, total Russian grain exports in 2009/10 were 21.36 million tonnes, down from 22.37 million in 2008/09, it said. Wheat exports are estimated to have been record high - almost 18.1 million tonnes, up from the previous season's 17.62 million.