Russian wheat prices down, barley exports hit record

Russian domestic wheat prices have fallen after rising for three weeks, under pressure from a stronger rouble, state export curbs and sales by farmers in need of cash ahead of spring sowing, analysts said on Tuesday. Russia's government has been trying to cool the domestic market since late last year when prices were boosted by increased exports following a slump in the rouble. It put informal curbs on wheat exports in December and imposed an official tax on wheat exports from February 1.
At the end of last week, prices for third-class wheat were down 175 roubles compared with a week earlier at 10,675 roubles per tonne in the European part of Russia on an ex-works basis, SovEcon agriculture consultancy said in a note. The rouble rose 12 percent against the dollar in February, but remains 47 percent weaker than at the start of 2014 due to lower oil prices and Western sanctions over Russia's role in the Ukraine's crisis.
Wheat prices have also been weakened by warnings from officials that they may review the wheat export tax, currently set at 15 percent of the customs price plus 7.50 euros, but no less than 35 euros ($39) a tonne. Officials have said they may review the tax once they get February export data by March 10.
However, exporters are not signing new deals because of the export curbs and are only continuing supplies under the previously agreed contracts, said Dmitry Rylko, head of the IKAR consultancy. Russia's wheat exports fell 57 percent year-on-year in February, according to the agriculture ministry. "The risk of regulation toughening is not high, in our view, with such a comfortable pace of exports for the government," SovEcon said.
Barley exports reached more than 320,000 tonnes in February, a record amount for the month, Rylko said. Russia's Anti-Monopoly Service has proposed imposing an export duty on barley, rye and maize (corn) on February 20, but has so far failed to secure support from other officials. In the domestic sunflower seed market, SovEcon said prices fell 75 roubles to 22,275 roubles per tonne, while FOB Black Sea prices for crude sunflower oil were flat at $750 per tonne.