October 26, 2010

Russian grain prices climb on declining rouble

Russian grain prices rose last week in rouble terms, but remained largely unchanged in dollars, as the local currency weakened and demand remained firm, analysts said Monday (Oct 25).

The Institute for Agricultural Market Studies (IKAR) recorded a series of modest price increases for various grades of wheat.

They said prices for third-grade hard wheat rose by RUB80 (US$2.63) per tonne to RUB5,790 (US$190) in southern Russia, while fourth-grade soft wheat rose by RUB150 (US$4.93) to RUB5,650 (US$185).

Prime Minister Vladimir Putin said on Friday he had signed a decree to extend Russia's grain export ban until July 1 but that the country had enough grain to meet its own needs.

The Agricultural Ministry also said last week that Russia had threshed 62.3 million tonnes of grain by bunker weight, with 92% of the harvest complete.

IKAR said that while there was "nothing surprising" about the prolongation of the export ban given previous announcements, they noted that it did not include flour sales.

"Flour was not mentioned in the list of prohibited commodities, meaning that from January 1, flour export may be resumed," the institute said.

IKAR counted potential wheat flour export at 300,000-400,000 tonnes with South European and Middle East countries as major recipients.

Corn prices also gained, with IKAR reporting prices up RUB210 (US$6.90) to RUB7,480 (US$246)/tonne.