MOSCOW: Russian wheat export prices fell for a second week in a row on a global benchmarks decline and cancellation of a state wheat tender in Egypt, the world’s largest buyer, analysts said on Monday.
Black Sea prices for Russian wheat with 12.5 percent protein content and for September delivery were $170.50 a tonne on a free-on-board (FOB) basis at the end of last week, down $1.50 from a week earlier, Russian agricultural consultancy IKAR said. SovEcon quoted FOB wheat prices in the Black Sea area down $2.50 at $172.50 per tonne. Benchmark December milling wheat on Paris-based Euronext lost 0.3 percent last week, while Chicago’s most active December wheat was trading near a 10-year low.
Egypt’s state grain buyer GASC cancelled its wheat tender last week after receiving just one offer as Cairo reinstated its zero-tolerance ergot policy – a move that baffled traders as the implementation of the policy late last year had led to disruptions to its wheat buying programme. “It is obvious that Egypt, the world’s largest wheat importer, will not be able to insist on supplies of wheat with zero ergot for a long time,” SovEcon said. “However, the situation will negatively affect Black Sea wheat exports until it is resolved.”
Russia exported 5.4 million tonnes of grains, including 4.5 million tonnes of wheat, between July 1 and Aug. 31, the agriculture ministry said. Grain exports were down 7 percent year on year. Official customs data has lagged real supplies this year due to technical issues, analysts have said.
Regarding Russia’s feed wheat export markets, Black Sea prices fell $10 to $154 per tonne due to massive supplies from the Baltic states, IKAR added. In the domestic market, farmers are still holding wheat of higher quality hoping for price rises, SovEcon said. Domestic wheat prices rose by 100 roubles last week, from the previous week, to 10,050 roubles ($155) per tonne in the European part of Russia on an ex-works basis. Ex-works supply does not include delivery costs. IKAR’s white sugar price index for southern Russia rose $28 last week to $582 a tonne at the end of the week.
