December 9, 2008

 

Russian grain prices remain stable while wheat prices increase

  
 
Russian grain prices were stable last week, while average wheat prices increased due to government grain purchase interventions, analysts said on Monday (Dec 8, 2008).

 

Government purchases into the intervention has set another weekly record of almost 663,000 tonnes Total volume of purchases reached 2.6 million tonnes, the Institute for Agricultural Market Studies (IKAR) said.

 

In the last few weeks, intervention prices have been much higher than cash market prices. The difference between export prices in the south of Russia and prices at the intervention tenders remained very large of about US$40 per tonne, it said.

 

SovEcon agricultural analysts said average domestic third-grade wheat offer prices in the European part of Russia rose by RUB225 (US$8.01) per tonne, fourth-grade by RUB75 per tonne while feed wheat increased by RUB25.

 

IKAR said most export prices remained practically unchanged, while ordinary food wheat rose to US$163 per tonne and feed barley to US$133.

 

SovEcon said exporters offered RUB3,500-4,200 per tonne of fourth-grade wheat and RUB3,500 per tonne of feed barley.

 

The government plans to increase prices at its intervention tenders for some regions, which have shortage of storage facilities in order to stimulate sales to other regions which have free storage capacities.

 

IKAR said the government is also negotiating with producers and traders in organising subsidies aimed at stimulating exports. So far, there are various options of how to subsidise exports of 10 million tonnes of grain.

 

Meanwhile, Sunseed prices rose last week as some large crushers raised bid prices by RUB100-500 per tonne, while average offer prices increased by RUB175, SovEcon said.

 

IKAR said the major crushers have not changed the bid prices keeping them between US$207 and US$215 per tonne. But some companies with tight stocks resumed purchase injecting real cash into the market.

 

Crude sun oil export price declined to US$670 per tonne, IKAR said. Domestic crude oil price continue to descend to US$608 to US$626 per tonne.

 

SovEcon said average crude sun oil offer prices lost RUB250 per tonnes last week. The analysts expect a stabilisation of prices on rising exports. Soy prices remained unchanged. Beans were offered at US$405 to US$435 per tonne, soy oil at US$590 to US$625 in the south of Russia, IKAR said.

 

US$1 = RUB28 (Dec 9, 2008)