October 5, 2007

Russia rushes to export grains before curbs next month

Russia exported a record monthly total of 2.4 million tonnes of grain in September, including 2.1 million tonnes of wheat, as traders rushed to settle contracts before the introduction of export curbs next month.

Dmitry Rylko, general director of the Institute for Agricultural Market Studies (IKAR), told Reuters that higher wheat prices and export restrictions in Ukraine also contributed to the push to sell grains.

Ukraine exported only 1,000 tonnes of wheat and 2,900 tonnes of barley in September due to government export restrictions from July 1 to Nov. 1, analyst firm UkrAgroConsult said.

Rylko said benchmark third-grade Russian wheat was trading this week at $340 per tonne, FOB Black Sea port, down from a recent peak of $370 per tonne.

Russian government officials have said the country will apply a wheat export duty of 10 percent, or no less than 22 euros ($31.04) per tonne, by the end of November to curb inflation.

Barley would be subject to an export tariff worth 30 percent of a contract's value, but no less than 70 euros ($98.76) per tonne.

The curbs are likely to precede intervention sales of up to 1.5 million tonnes of wheat from government stocks.

Meanwhile, Russia's Agriculture Ministry raised its 2007 grain crop forecast to 79 million tonnes, compared with 78.6 million tonnes last year, and said exports would hit 12 million tonnes in the current 2007/08 season -- up from a previous forecast of 10 million tonnes.

Since the beginning of the 2007/08 season in July, Egypt has been the main buyer of Russian wheat.