Russian grain and sunseed markets continued on a downward trend last week, although prices for some cereals began to stabilise and even edged up due to government purchases and demand from exporters, analysts said. The domestic ordinary wheat export price varied between $150 and $160 per tonnne, FOB Novorossiisk, the Institute for Agricultural Market Studies (IKAR) said.
Third-grade wheat increased by $2 per tonne to $162 in the south of Russia, fourth-grade wheat dropped slightly to $120, fifth-grade feed wheat decreased by $6 to $96, while feed barley dropped by $8 to $95 per tonne. SovEcon agricultural analysts said exporters had set fourth-grade wheat prices in a wide range of 3,500-4,400 roubles ($127-$159.6) per tonne, CPT deep and shallow-water ports.
It said exporters offered to buy fifth-grade feed wheat at 3,000-3,400 roubles per tonne, CPT shallow-water port, and were offering 2,200-2,600 roubles per tonne of maize, which Russia traditionally does not export. SovEcon said average third-grade wheat prices in the European part of Russia declined by 225 roubles per tonne, while in the Central Black Soil region they rose by 50-100 roubles. Fourth-grade wheat fell by an average of 75 roubles per tonne, while feed wheat and feed barley lost 100-150 roubles. Export demand prevented maize prices from a further decline.
Last week, wheat of Russian origin won three major import tenders for a total of 180,000 tonnes, which shows a recovery in interest after a substantial fall in domestic export prices, IKAR said. One of the key reasons for this are the record-high intervention purchases. Last week the government acquired 416,000 tonnes of grains, with total purchases reaching almost 1.5 million tonnes since the start of the season, IKAR said.
GRAIN EXPORTS: According to IKAR's preliminary information, grain exports have reached 9.7 million tonnes since the start of the current season, including 8.6 million tonnes of wheat.
This is a rise on the same period of last year, although export volumes in October and November 2008 were lower than in the same months of 2007. The Russian government is considering special measures to support domestic grain trade and export activities. There are two key versions of the plan, both of which envisage the introduction of export subsidies and other support measures, IKAR said.
SovEcon added the plan may include cutting railway fees and extending loans to countries which buy Russian grain and flour. Domestic sunseed prices have not changed much, varying around $195-205 per tonne, IKAR said. It said the liquidity crisis had caused substantial payment delays on the part of processors, which is discouraging farmers from supplying sunseeds.
SovEcon said exporters, which have for the first time shown interest in setting sunseed prices in the region of 5,500 roubles per tonne, including delivery to ports, had provided support to domestic prices. Average prices rose slightly last week in the North Caucasus, and their descent slowed in the Volga and Central Black Soil regions.
The crude sunoil export price varied between $690 and $710 per tonne, while domestic prices continued to descend last week, IKAR said. SovEcon said domestic crude sunoil lost 500 roubles per tonne.
IKAR estimated Russia's sunoil exports at a record 102,000 tonnes, while SovEcon believes exports were 88,000 tonnes compared with 12,000 tonnes in September. Another attempt by refiners to raise white sugar prices was unsuccessful, IKAR said. Dollar-denominated prices declined slightly to $511 due to the strengthening of the rouble. IKAR has raised its domestic beet sugar output forecast to 3.15 million tonnes.
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