Russian domestic wheat prices to hit new highs
Russian domestic wheat prices, up around 60 percent since spring, hit new highs last week and are expected to rise further as demand on a drought-hit market exceeds supply from the state stocks, SovEcon agriculture analysts said on Monday. One of the world's key wheat exporters, Russia aims to sell up to 1.25 million tonnes of grain from its 5-million-tonne stocks, after hot and dry weather slashed its wheat harvest by a third, raising domestic prices.
Copyright Reuters, 2012
Sales started in October have not had much effect so far. Russia's average domestic EXW (ex-silo) prices in the European part of the country for third-grade wheat rose 150 roubles to 10,550 roubles ($340) per tonne last week, a new record level in rouble terms, SovEcon said. Prices for fourth-grade milling wheat rose 175 roubles to 10,350 roubles per tonne, while those for fifth-grade feed wheat added 250 roubles to reach 9,900 roubles per tonne. Average wheat prices in Siberia and Urals regions rose 250-300 roubles last week, SovEcon added.
The Russian government plans to sell up to 130,000 tonnes of grain per week from October 23 until the end of the year. It has already sold 693,223 tonnes of grain during the first 12 tenders. As to wheat export prices, demand remained weak last week as Russian prices are still higher than Paris wheat January milling wheat seen at 271.25 euros ($350) by 0917 GMT on Monday.
The purchase price of fourth-grade milling wheat in Russian deep-water ports were flat at 11,200-11,300 roubles ($360-$370) per tonne on a carriage-paid-to (CPT) basis, SovEcon said. In shallow-water ports it was seen at around 10,000 roubles per tonne on CPT. The country is expected to ship 700,000-800,000 million tonnes of grain this month, down from 1.55 million-1.60 million tonnes in November, Russia's Institute for Agricultural Market Studies (IKAR) said on Monday. Wheat export in November reached 900,000 tonnes, IKAR added.
As for maize (corn) and barley prices, they are expected to rise further in the coming weeks, and their growth can outpace wheat price increase in the Central region, SovEcon said. Domestic maize prices added 150 roubles last week to reach 8,750 roubles per tonne, milling rye rose 250 roubles to 7,500 roubles per tonne, while feed barley was seen at 8,225 roubles per tonne, up 225 roubles, it added.
Maize prices in deep-water ports were stable last week at 9,300-9,500 roubles ($300-$310) per tonne, SovEcon said. IKAR pegged it at $305 per tonne. In shallow-water ports maize prices fell 9,000-9,200 roubles ($290-$300) per tonne, down 300 roubles, according to SovEcon, while IKAR saw them at $280 per tonne. For sunseeds, domestic prices rose 25 roubles to 16,725 roubles per tonne, while export prices were quoted at 36,950 roubles ($1,200) per tonne on a free-on-board basis, up 275 roubles.