Russian wheat prices declined last week because of an increase in the pace of this year's rain-delayed harvesting and rouble weakness, analysts said on Monday. As of July 23, Russian farmers had harvested 27.5 million tonnes of grain from 16 percent of the total area, with yields at 3.71 tonnes per hectare. The rouble has fallen in line with a declining oil price.
Black Sea forward prices for Russian new-crop wheat with 12.5 percent protein content were at $191 per tonne on a free-on-board (FOB) basis at the end of last week, down $6 from a week earlier, the IKAR consultancy said. SovEcon agriculture consultancy quoted FOB wheat at $192.5 per tonne, down $6, with barley down $1 at $181 per tonne.
Prices found some support from high export demand, SovEcon added. Last week, the state buyer of Egypt, the world's largest wheat importer, agreed to buy Russian wheat with a price range of $194-196 per tonne on an FOB basis compared with $198.5-199.8 per tonne in the previous tender. The weaker rouble allows Russian producers to lower the dollar price of their wheat, increasing its competitiveness on global markets, while maintaining local-currency returns.
Since the start of the 2015/16 marketing year on July 1, Russia has exported 1.3 million tonnes of grain, including 700,000 tonnes of wheat, 423,000 tonnes of barley and 135,000 tonnes of maize (corn). The pace of exports is down 34 percent year-on-year, the Agriculture Ministry said in a note, with rain-induced delays to harvesting and a new wheat export tax, launched on July 1, curtailing shipments.
Domestic prices for third-class wheat were down 25 roubles compared with a week earlier at 9,375 roubles ($159) per tonne in the European part of Russia on an ex-works basis, SovEcon said. SovEcon added that FOB Black Sea prices for crude sunflower oil were down $10 at $820-830 per tonne. IKAR's white sugar price index for Russia's south was at $749.7 per tonne, down $5.4 from a week ago.