Russian wheat prices fall for 5th week as competition tight

Usama Fayyaz September 3, 2019

MOSCOW: Export prices for Russian wheat fell last week for the fifth consecutive week as competition with Ukraine and other producers intensified, analysts said on Monday.

Russian wheat exports have been slow so far this season, to the benefit of Ukraine which has seen a surge in its grain shipments, traders said last week.

Black Sea prices for wheat with 12.5pc protein content fell $1 to $189 a tonne on a free on board (FOB) basis by the end of last week, Russian agricultural consultancy IKAR said.

SovEcon, another Moscow consultancy, pegged wheat at $189 a tonne, down $2 “as Russia’s suppliers need to compete with other origins.” Barley dropped $4 to $177 a tonne.

Russia has exported 8.7 million tonnes of grain since the start of the 2019/20 season, 7pc less than in the same period of the previous year, SovEcon said. That figure included 7.3 million tonnes of wheat.

On the domestic market, prices for third-class wheat rose by 25 roubles to 10,525 roubles ($160) a tonne at the end of last week in European parts of Russia on an ex-works basis, SovEcon said. Ex-works does not include delivery costs.

The weather in the Black Sea region is expected “to be very dry in the next two weeks, which is beneficial for the harvest of sunflower and corn. However, this could lead to a lack of moisture for winter wheat,” SovEcon said.

Russian farmers have already sown winter grains for next year’s crop on 15.2pc of the planned area, or on 2.7 million hectares.

Sunflower seed prices were steady at 20,100 roubles a tonne, and domestic sunflower oil prices remained at 46,500 roubles a tonne, SovEcon said.

FOB export prices for sunflower oil of new crop are being formed around $705 a tonne, it added.

IKAR said its price index for white sugar from southern Russia fell by $5 to $353.6 a tonne.

Copyright Reuters, 2019

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