August 16, 2011

 

Russian grain prices increase amid weaker rouble, demand

 

 

Both weaker currency and demand caused Russian grain prices to rise in rouble terms last week but prices changed less drastically in dollar terms, according to analysts on Monday (Aug 15).

 

The Russian rouble weakened beyond the psychologically important mark of 30 versus the dollar for the first time since January on Tuesday (Aug 16).

 

Average EXW milling wheat prices rose by RUB200 (US$6.99) to RUB5,125 (US$179.10) per tonne in the European part of Russia, feed wheat by RUB100 (US$3.49) to RUB4,525 (US$158.13) per tonne, barley by RUB100 (US$3.49) to RUB5,500 (US$192.20), SovEcon agricultural analysts said.

 

They said in a weekly note that milling wheat prices rose most notably, by RUB300-400 (US$10.48-13.98), in the export-oriented North Caucasus region. But prices also rose in the Central Black Soil region and in the regions along the Volga River.

 

"There is a short-term potential for further wheat price rise," SovEcon said. "But if it continues, Russian prices may become closer to those of French wheat."

 

The Institute for Agricultural Market Studies said in a separate note that fourth-grade wheat prices in southern Russia rose to RUB5,600-5,800 (US$195.70-202.69) per tonne from RUB5,300-5,500 (US$185.21-192.20) due to weak rouble.

 

In Novorossiisk, buyers have raised fourth-grade wheat prices to RUB6,400-6,500 (US$223.66-227.15) per tonne from RUB6,000-6,400 (US$209.68-223.66) a weak before, SovEcon said, adding that transportation costs to ports rose due to traffic jams on roads leading to Novorossiisk.

 

In dollar terms, the FOB Black Sea price for milling wheat with 11.5% protein content (fourth-grade) was little changed at US$255-257 per tonne, IKAR said.

 

CPT (carriage paid to) price declined to US$215 from US$224 at the start of last week in Novorossiisk, but then rebound to US$217-220 per tonne, it said.

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