Russia's grain prices increase on strong demand

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Publish time: 2nd April, 2014      Source: www.cnchemicals.com
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April 2, 2014

   

   
Russia''s grain prices increase on strong demand
   
   

   

With continued strong demand from consumers and farmers holding off sales in anticipation of further price growth, Russian grain prices rose further last week, Russian analytical firm SovEcon said.

   

   

SovEcon said limited sales by farmers and continuing active domestic and export demand have been the main factors behind the (price) growth.

   

   

Russia, expected to be the world''s fifth largest wheat exporter this year, has already exported 20.8 million tonnes of grains between July 1 and March 25, the Institute for Agricultural Market Studies (IKAR) said. This estimate included 15.0 million tonnes of wheat and 3.0 million tonnes of corn, IKAR said. It kept its full-year wheat exports forecast unchanged at 17 million tonnes with corn exports seen at 3.7 million tonnes.

   

   

Russian export prices for wheat with 11.5% protein content rose last week by US$6 to US$299 per tonne from a week earlier on a free-on-board (FOB) basis in deep-water ports, SovEcon said. Corn prices were up US$1 at US$248 per tonne. IKAR pegged FOB prices for wheat with 12.5% protein content at US$296 per tonne in the Black Sea and US$266 a tonne in the Azov Sea. It quoted corn prices at US$246 in the Black Sea and US$210 in the Azov Sea.

   

   

Russian sunflower seed prices rose RUB350 (US$9.90) to RUB13,150 (US$370) a tonne at the end of last week, SovEcon said. Export prices for sunflower oil were down US$30 at US$850-870 a tonne on an FOB basis in the Black Sea.

   

   

There are concerns over winter grain conditions after cold weather in Russia''s southern regions over the weekend, SovEcon said, adding that it will be able to estimate the effect in about a week. Its index before the weekend had been showing that conditions for planting were above a multi-year average.

   

   

The Krasnodar and Stavropol regions, Russia''s key grain growing regions near the Black Sea, saw temperatures of minus five Celsius (23 Fahrenheit) during nights and morning hours over the weekend. Night time temperatures below zero are also expected in Stavropol this week, according to state weather forecasters. Meanwhile, Russia''s spring sowing was going slightly faster than last year, according to agriculture ministry data. Russia plans to sow 53.0 million hectares of crops this spring, including 31.8 million hectares with grains and pulses.

   

   

As of March 28, it had handled 712,200 hectares, or 1.3 % of the whole planned spring area, which was 240,600 hectares more than at the same date a year ago. As to demand, Russia''s Agriculture ministry has announced prices which it is ready to pay for grain it may buy on the market this year to replenish its "intervention stocks", which are used to boost domestic supply in years of poor harvests and to support prices in years of large crops.

   

   

The ministry did not say when it may start the programme. Its announced prices for third-class wheat are significantly lower than the current market level: the government is ready to pay RUB6,750 (US$191) per tonne, while this type of wheat was trading at RUB8,900 (US$252) per tonne in the European part of Russia last week. The ministry''s previous programme was frozen in mid-February after it bought 610,065 tonnes of grain in its intervention tenders in Siberia since the start of 2013-14 year.