Russian grain prices rose steadily last week on limited supply, with sellers setting new price levels daily, although the overall rate of increase was slower than in previous weeks. The domestic wheat and rye markets climb to new record highs, the independent Institute for Agricultural Market Studies (IKAR) said.
After the introduction of a prohibitive wheat export tariff, the price-formation point has moved from the export-oriented south of Russia to the domestically oriented Central Black Earth region, IKAR said.
It said third-grade wheat prices rose by $11 per tonne last week to $368 per tonne in this region. Fourth-grade wheat rose $17 to $351 and fifth-grade feed wheat $16 to $337, IKAR said. SovEcon agricultural analysts said third- and fourth-grade milling wheat added 300 roubles on average last week, feed wheat 200 roubles and milling rye 150 roubles. Maize prices were largely unchanged, SovEcon said.
Barley and maize prices were stable, meeting strong resistance to further rises as animal breeders had replenished their feed grain stocks several weeks ago, IKAR said. Traders bought grain for processors and short-term speculation on the bullish domestic market. Traders in the European part of Russia were looking for grain in western Siberia, where stocks are relatively high, SovEcon said.
SovEcon said the rally on grain markets may end due to the absence of exports, relatively high stocks and good prospects for the new crop, which is officially forecast to be in the region of 85 million tonnes.
A preliminary forecast by IKAR showed Russian seasonal grain exports as having reached 13.1 million tonnes since the start of the 2007/08 crop year in July, including 330,000 tonnes of flour in grain equivalent. Last week, sunseed prices rose by $10-$20 to new historical highs of $855-$865 per tonne, IKAR said.
SovEcon said sunseed prices in most regions rallied on low supply, with offer prices starting at 20,000 roubles per tonne and crushers declaring purchase prices at 19 sunseed oil reached $1,950-$2,000 per tonne, gaining $100 last week, IKAR said. It said supply was becoming scarce, as a number of plants were being shut down and remaining crushing facilities had cut output.
Since the start of the season, total sunseed oil exports fell to 142,000 tonnes compared to more than 300,000 tonnes in the same period a year ago. Crude sunoil rose 1,500 roubles last week, with some crushers declaring offer prices at around 50,000 roubles per tonne, SovEcon said.
IKAR said white sugar rose slightly last week to $710 per tonne, mainly due to weakening of the dollar. Supply was scarce, but stocks in the regions remained relatively high. IKAR expect a rise in the coming weeks, as regional stocks will dwindle with low imports.
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