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Wheat-spikeMOSCOW/KIEV: Russia's domestic wheat prices continue to decline, ruling out imports of wheat from Ukraine, which may decide to make wheat available from April, Russia's SovEcon agriculture analysts said on Monday.

The Russian wheat market has been stretched by last year's drought stricken harvest, but prices have been falling since early February as a result of sales from state intervention stocks.

Russia currently imports wheat from Kazakhstan which does not have to pay a 5-percent grain import duty. The Russian government plans to remove the tariff in April or May and until early July or August when new crop is likely to arrive.

The proposal would decrease the price for wheat from Ukraine, another major wheat exporter in the Black Sea region, by about 500 roubles ($16), SovEcon said in a note.

Ukraine will decide next month whether to lift restrictions on wheat exports that were imposed after a poor harvest last year, Agriculture Minister Mykola Prysyazhnyuk said last week.

"The price for Ukrainian milling wheat is estimated at slightly more than 11,000 roubles ($360) per tonne now including delivery to the Russian border and duty payments," SovEcon added. "This is not very interesting for consumers in Russia's Central Black Earth region."

Ukraine has capped exports at 6.3 million tonnes in the current season, which runs to June 2013. So far in the current season wheat exports have reached 6.179 million tonnes.

The average domestic EXW (ex-silo) price in the European part of Russia for milling wheat declined by 200 roubles to 10,875 roubles ($350) per tonne last week, SovEcon said.

Price for Ukrainian third class milling wheat was seen at $263 per tonne excluding works last week.

Russia's feed wheat lost 200 roubles to reach 10,575 roubles per tonne last week, while barley fell 175 roubles to 8,850 roubles per tonne. Maize (corn) prices were down 150 roubles at 8,925 roubles per tonne, while rye prices were seen at 8,050 roubles per tonne, down 200 roubles.

Russia's exportable surplus of wheat was exhausted several months ago, while some maize export continues. Maize export prices fell to 8,300-8,700 roubles per tonne last week from 8,400-8,800 roubles per tonne on a carriage-paid to (CPT) basis, SovEcon added.

Domestic prices for sunflower seeds fell 100 roubles to 16,275 roubles per tonne, it said. Export prices for crude sunflower oil were down $10 at $1,140 a tonne on a free-on-board basis.

Russia's domestic sugar prices were flat at 21,200 roubles ($690) per tonne, the Institute for Agricultural Market Studies (IKAR) said.

Copyright Reuters, 2013

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