September 13, 2011

 

Russian grain export prices drop due to competitor

 

 

The appearance of Kazakhstan on the market caused Russian grain export prices to decrease for the first time this season whereas increment in domestic prices has delayed because of logistical issues, according to analysts on Monday (Sep 12).

 

FOB Black Sea price of wheat with 11.5% protein content eased to US$290 per tonne from US$293, the Institute for Agricultural Market Studies (IKAR) said in a weekly note.

 

"Successful and earlier than expected emergence of Kazakh wheat on the Egyptian market is weakening the position of Russian wheat on the export market," it said.

 

Last week, Egypt, the world's largest wheat importer, bought 300,000 tonnes of Russian and Kazakh wheat for November 11-20 shipment.

 

"Kazakhstan is a strong competitor with a significant export potential," SovEcon agricultural analysts said in a separate note, adding that Russia also faced competition from France as French wheat prices were close to Russian.

 

It said prices, including delivery (CPT) to Novorossiisk, rose by some RUB100 (US$3.31) to RUB7,500-7,600 (US$248-251) per tonne and to shallow water ports by the same amount to RUB6,400-6,500 (US$211-215) per tonne.

 

Russian EXW milling wheat prices rose by just RUB50 (US$1.65) last week in the European part of Russia, compared to a rise of RUB325 (US$10.74) a week before, SovEcon said.

 

It said third-grade wheat was offered at RUB6,200 (US$205) per tonne, fourth-grade at RUB6,150 (US$203).

 

SovEcon said market players linked the slowdown to a temporary ban of grain shipments to the main Russian deep sea port of Novorossiisk, which was partially lifted last week.

 

IKAR added that domestic wheat prices were influenced by a stronger dollar last week.

 

It said in the Central Black Soil region wheat of all grades rose by RUB350-450 (US$11.57-14.88), or by US$8-11 per tonne.

 

Only in southern Russia prices edged up due to a delay in the harvesting campaign, it said.

 

SovEcon said first offers of new crop sunseeds appeared on the market in the range of RUB11,000-13,000 (US$363-430) per tonne in North Caucasus. It said most processors were ready to buy at RUB12,000 (US$397) per tonne and some at RUB11,500 (US$380).

 

New soy crop is not yet traded, but prices are estimated at between RUB12,000 (US$397) and 14,000 (US$463) per tonne, IKAR said.