February 3, 2009
Higher grain prices reduce Russia's state purchases
Higher Russian grain prices have stopped producers from selling grain to the government last week, analysts said on Monday (Feb 2).
Standard wheat export prices have increased to US$200 per tonne FOB, according to the Institute for Agricultural Market Studies (IKAR).
Grain demand from exporters remained active last week. Bid prices for fourth-grade milling wheat reached RUB5,800-6,000 per tonne CPT, said SovEcon agricultural analysts.
SovEcon said domestic demand has also increased, as distillers and animal breeders joined millers in the grabbing up of stocks in the last few weeks. Some processors were trying to build up stocks awaiting higher prices.
Feed barley and corn prices in southern Russia also rose to US$103 and US$108 per tonne, respectively.
The government's grain purchases last week shrunk to less than 300,000 tonnes, compared with 500,000 and 600,000 tonnes in the previous weeks, as purchase prices became less appealing.
"Grain stocks holders kept sales at low volumes awaiting higher prices. Such tactics may have some reason in short term. But if exporters and processors reduce purchases then market may stabilise and then go down," SovEcon said.
According to the Russian Agriculture Ministry's data from January 30, 2009, a total of 6.6 million tonnes of grain worth RUB31.026 billion has been bought into the state intervention fund.
US$1 = RUB36.0880 (Feb 3)
