MOSCOW: Russian wheat export prices rose further last week due to concerns that cold and rainy weather in May could hit the quality of the harvest and also due to a stronger rouble currency, analysts said on Monday. Farmers are becoming more concerned about the new harvest due to excessively wet and cold spring weather, Russian agricultural consultancy SovEcon said. Many farmers still expect a good crop but predict more modest quality. “The development of sowings is lagging behind schedule. The cold weather of the past weeks has negatively affected the potential yields of sugar beet, soybeans and barley. The risks of disease development are rising,” it said. SovEcon and IKAR, another Moscow-based consultancy, both said that Black Sea FOB prices for Russian wheat with 12.5 percent protein content rose $1 at the end of last week from a week earlier to $186.50 and $186 per tonne, respectively. SovEcon pegged prices for the new crop for July-August delivery at $172-175 a tonne, up $1.50, while IKAR put prices at $174, unchanged from the previous week. The rouble rose 0.7 percent against the dollar last week, helped by stronger oil prices.
Exports to Turkey, the second largest buyer of Russian wheat after Egypt, have been hit by a stop-start agricultural trade dispute between Moscow and Ankara. SovEcon and traders told Reuters last week that Turkey had introduced new curbs on Russian wheat, limiting purchases to 20-25 percent of all import licences issued for the commodity. However, Turkey said it was not true that restrictions had been put in place. The leaders of Russia and Turkey discussed agreements previously made about removing economic restrictions between Moscow and Ankara during a phone call on Saturday, the Kremlin said.
Russia exported 32.7 million tonnes of grain, including 25.2 million tonnes of wheat, between July 1 and May 24, the agriculture ministry said. That equated to a 1.3 percent rise year on year. Spring grain sowing is currently running 1.3 million hectares slower than a year ago, closing a gap of 1.7 million hectares seen a week earlier, mainly due to efforts in the Volga region. The main delays are in Siberia and the Urals region, which are far away from Russia’s export regions but are important for maintaining the domestic supply-consumption balance. The sowing of barley is running at its slowest pace since 2010, while spring wheat sowing is 1.2 million hectares slower than a year ago, SovEcon said. As of May 26, farmers had sown spring grains on 80.1 percent, or 24.8 million hectares, of the planned area, the agriculture ministry said. That was down from 26.1 million hectares from the same date last year. Domestic prices for third-class wheat were down 100 roubles from a week earlier to 9,125 roubles ($160.90) a tonne in the European part of Russia on an ex-works basis, SovEcon said. Ex-works supply excludes delivery costs. Russian sunflower seed prices rose by 125 roubles to 17,700 roubles a tonne, SovEcon said, while domestic sunflower oil prices remained at 40,575 roubles and export oil prices fell $5 to $710 a tonne. IKAR’s white sugar price index for southern Russia rose $34 to $606.40 a tonne as of May 26.
