July 23, 2012

Russia's grain prices up on down harvest forecasts

Russia is facing an increase in grain prices at an atmosphere of reduced harvest forecasts and growing world prices, according to a statement of the country's National Grain Producer Union released Friday (July 20).

On Tuesday (July 17), the Agriculture Ministry revised its forecast for the country's 2012 grain harvest to 80–85 million tonnes from 85 million tonnes previously.

"Over the past week, grain went up in price in the Southern and North Caucasus federal districts. A growth of grain prices globally along with reduced volumes of grain production in the southern regions of the country is forcing exporters to raise purchase volumes and expand their geography to the European part of the country," the union said in the statement.

The union also noted that increased grain prices in the Volga and Siberian federal districts resulted from shrinking grain reserves and decreasing harvest forecasts.

According to the union, the prices of third class wheat in the North Caucasus, Siberian, Southern, and Volga federal districts climbed by RUB250 (US$7.8) per tonne over the course of the week starting on July 9. In the southern regions, wheat cost RUB7,800-8,400 (US$243-262) per tonne and RUB6,500-7,400 (US$202-230) per tonne in Siberia. In the Central Federal District, the price of third class wheat edged up by RUB150 (US$4.67), and RUB100 (US$3.11) in the Urals Federal District.

The price of wheat of the fourth class in the Central Federal District grew by RUB250 (US$7.8) per tonne, RUB200 (US$6.2) in the southern regions, and RUB100 (US$3.1) in the Volga, Siberian, and Urals federal districts.

The value of wheat of the fifth class in the Central, Siberian, and Urals federal districts added RUB200 (US$6.2) to RUB6,400-7,100 (US$199-221)) per tonne in the central regions, and RUB6,900-7,500 (US$215-233) per tonne in the southern regions.

In 2011, Russia's grain harvest was at 94.2 million tonnes in clean weight.