March 23, 2010

 

Russia grain prices trend down

 
 

Russian milling wheat exports rose to reflect a weaker US dollar last week, in contrast to a decline in domestic grain prices that followed the international market trend, according to analysts.

 

Analysts and traders expect Russian grain prices to decrease further as international market conditions are unfavourable for domestic producers struggling with rising expenses.

 

"We maintain a bearish outlook for the domestic market as there is still room for the international prices to fall," Moscow-based agricultural analyst group SovEcon said. "Logistical costs have increased and the rouble is rising."

 

SovEcon said bid prices for fourth-grade (ordinary) wheat, including delivery (CPT) to Novorossiisk, declined last week to RUB4,600-4,700 (US$156-159) per tonne from RUB4,700-4,800 (US$159-163) a week before.

 

Some traders expect prices to fall to RUB4,200-4,400 (US$142-149) per tonne, SovEcon said.

 

Domestic prices for most cereals declined by an average of RUB50-100 (US$1.7-3.4) per tonne, while corn lost RUB200 (US$6.8) on rising supply to fall to RUB4,700 (US$159) per tonne, SovEcon said.

 

Only a weaker dollar pushed up the free-on-board (FOB) price of ordinary milling wheat. The Institute for Agricultural Market Studies (IKAR) said wheat with bug damage of up to 1% ended the week up US$2-3 at US$171 a tonne, FOB Novorossiisk.

 

IKAR said Russian grain exports from the start of the crop year in July to mid-March exceeded 15 million tonnes, including 12.8 million tonnes of wheat and 1.8 million tonnes of barley.

 

Russia exported 15.695 million tonnes in the same period a year ago. IKAR said it expects March grain exports of no more than two million tonnes compared with record March 2009 exports of 2.16 million tonnes.

 

Russian grain exports are slowing from the record volumes of 2008-09. IKAR expects exports in the 2009-10 season to total 20 million tonnes, down from 23 million tonnes in 2008-09.

Video >

Follow Us

FacebookTwitterLinkedIn