Russian grain prices continued to rise rapidly last week because of a spreading drought, which made holders of grain reluctant to part with their stocks, analysts said on Monday. A recent Egyptian tender has confirmed that Russian milling wheat remains competitive on the regional market, the Institute for Agricultural Market Studies (IKAR) said.
Egypt's main government wheat buyer GASC said on Saturday it had bought 180,000 tonnes of Russian wheat at $238-$243 per tonne for August 21-31 shipment on a free on board basis. IKAR has raised its price index for ordinary milling wheat index to $235 per tonne from $218 on the tender results.
The barley export market was inactive due to lack of supply, IKAR said, estimating the virtual FOB price index at $180 per ton. Most grain producers and holders of grain stocks expect prices to rise further and are selling minimal volumes of cereals, SovEcon agricultural analysts said.
This and a rise in international prices caused by low export expectations due to the drought forced exporters to raise prices further. Fourth-grade wheat (ordinary) prices at deep water Black Sea ports including delivery (CPT) rose to 6,400-6,600 roubles ($211.6-$218.2) per tonne, it said.
SovEcon said average producers' EXW prices rose by 900 roubles for fourth-grade (ordinary) wheat to 5,725 roubles per tonne, by 925 roubles for third-grade wheat to 5,775 per tonne and by 900 roubles for feed barley to 4,250 per tonne. Traders were discussing the possibility of export restrictions, SovEcon said. It said the possibility of restrictions was rather high, but technically the setting of them was difficult especially because it has to be agreed upon with partners in the recently created customs union - Belarus and Kazakhstan.
Average sunoil prices rose last week by 2,000 roubles to 30,500 roubles per tonne due to a seasonal shortage of supply. Rapeseed prices rose to 10,000-11,000 roubles per tonne from 9,000-9,500 roubles as heat started affecting sunflowers, SovEcon said. White sugar prices were unchanged in rouble terms, at - 26,700 roubles per tonne but gained slightly in dollar terms due to dollar weakening, rising to $884 per tonne from $875 in Krasnodar, IKAR said. IKAR does not expect sugar prices to fall sharply this year with the start of the beet processing season as crop has been damaged in some regions.
First sugar beet processing will start up in the Krasnodar region in the coming week. However bearing in mind the next to disastrous state of the sugar beet crop in many Russian regions domestic white sugar prices are unlikely to drop substantially.
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