Russian domestic grain prices declined further last week, with few deals struck on the eve of the new crop year, but export prices were stable, analysts said. "In general, the market remains very thin, as traders are mixed between potential fund activities and the growing pressure of a good harvest," the Institute for Agricultural Market studies (IKAR) said.
IKAR General Director Dmitry Rylko told Reuters funds were investing in commodities, including grain, which had prevented prices from falling dramatically. On average, most cereals lost 200-250 roubles ($8.53-$10.66) per tonne, SovEcon agricultural analysts said.
Feed barley prices declined by 350 roubles per tonne as the first shipments of new-crop winter barley appeared on the market in the south of the country, SovEcon said. The winter barley FOB export price was fixed at about $265-270, while domestic ex-silo elevators struck their first deals at around $200-205 per ton, IKAR said. SovEcon said wheat prices fell notably in western Siberia, while in European Russia the decline of prices for high-quality milling third-grade wheat with high gluten content of over 25 percent was slower, on demand from millers and lower supply. Exporters offered to buy new crop fourth-grade milling wheat for 5,700 roubles per tonne and feed barley at 5,500 roubles per tonne, CPT Novorossiisk.
Export prices for fourth-grade milling wheat remained at $280-300 per tonne FOB Novorossiisk, SovEcon said. The result of the latest tenders in Egypt, Iran and Pakistan showed that importers were prepared to buy Russian wheat at $295-320 per tonne FOB.
Russian wheat appears competitive on export markets, as European prices and those in the United States are supported by the maize market, SovEcon said, forecasting export prices to remain at or above $300 per tonne FOB. Sunseed and sunoil prices declined. SovEcon said rising vegetable oil imports, especially soy oil, could push prices down further in July.
IKAR said domestic white sugar prices declined to $671 per tonne last week from $677 a week before. "A further price decline would be painful for sellers, as domestic prices have approached the cost of production from raws," IKAR said.
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