October 7, 2008

Russia grain prices lapse, following world trend

Russian grain prices kept falling last week, following international prices and forcing exporters, who had accumulated significant stocks, to lower domestic bid prices.

Standard wheat Novorossiisk FOB November delivery contracts traded at US$225/tonne, the Institute for Agricultural Market Studies (IKAR) said. It said third-grade milling wheat prices declined by RUB47 to RUB5,910 per tonne in southern Russia, fourth-grade by RUB168 to RUB4,885 and fifth grade feed wheat by RUB142 to RUB3,948.

SovEcon agricultural analysts said average third-grade wheat prices lost RUB250 per tonne; fourth-grade wheat lost RUB225 and feed wheat RUB75. Wheat exports accounted for 5.65 million tonnes since the start of the season.

Domestic ex-silo corn prices stayed at unusually low levels due to a shortage of drying and storage facilities. The Krasnodar price is estimated at RUB3,300 per tonne, which makes export operations realistic.

SovEcon said the decline of corn prices slowed last week to RUB100 per tonne from RUB400 a week before.

IKAR said that, as of the end of September, Russia had exported a record high volume of grains, totaling 6.3 million tonnes and including more than 3.1 million in September.

About a quarter of the planted area has been harvested with yields at 1.57 tonnes per hectare, 0.22 tonnes higher than at the same date a year ago, IKAR said.

Rapeseed oil was offered at RUB26,000 per tonne and soy oil at RUB23,000-25,000 per tonne.

RUB1 = US$0.03808 (October 7, 2008)