August 29, 2011

Russian wheat export prices rise last two weeks

Higher demand has caused Russian wheat export prices to increase 10%, or by US$25/tonne, over the past two weeks, a trend likely to persist in the following weeks, according to the managing director of Moscow-based think tank SovEcon on Friday (Aug 26).

SovEcon said Russian wheat for export is now quoted at US$280-285 per tonne, free-on-board basis, compared with US$260/tonne two weeks ago.

The director said wheat exports out of Russia continue to rise due to the falling value of the ruble as well as higher demand. The recent weakness in the ruble versus the dollar can make the international wheat export price look even more attractive to overseas buyers, he said.

"I am 90% sure that Russian export prices will continue to rise over the next few weeks, but after that, everything depends on the world grains market, especially fundamentals in corn," he said. "It is possible corn and wheat could move even higher in price."

Grain exports from Russia hit a record of 2.6 million tonnes in July after the Kremlin lifted an almost year-long ban on exports.

Russia harvested 57.9 million tonnes of grain by August 23, accounting 22 million hectares, or 50% of the total area to be harvested, the Agriculture Ministry reported Tuesday (Aug 23).

The ministry said grain exports since the beginning of the current marketing year July 1 totalled 4.4 million tonnes, 11% more than in the corresponding period in the previous marketing year.

Wheat harvest to date was 37.3 million tonnes on 12.6 million hectares, or 49% of the total area to be harvested. The average yield was 2.97 tonnes a hectare compared with 2.32 tonnes a hectare a year ago and 2.89 tonnes a hectare in 2009.