Volga Baikal AGRO NEWS Update on the Wheat Price Market in RF !!!

Wheat in Russia is becoming too expensive for bakers

Volga Baikal AGRO NEWS Update on the Wheat Price Market in the Russian Federation !!!

Wheat prices in Russia are breaking records. Over the past week, against the backdrop of aggressive demand from exporters and favorable conditions on world markets, quotations exceeded 15 thousand rubles. per ton. The situation may lead to increased pressure from grain consumers on officials with requests to intervene in the situation, which threatens new restrictions for participants in the grain market.

Over the week by October 16, prices for wheat of the third and fourth classes in the center of Russia increased by 400 rubles. and exceeded 15 thousand rubles. per ton, Sovekon reported in its review. This is a new historical record. Barley rose in price by 175 rubles, to 11.27 thousand rubles. per ton, corn – by 125 rubles, up to 13.3 thousand rubles. per ton. The key driver of price growth is aggressive purchases from exporters and higher rates in ports.

According to Sovecon, the purchase prices for wheat with protein at 12.5% ​​in deep-water ports of the Russian Federation increased from 16.9-17.6 thousand rubles over the week. up to 17.8-18.4 thousand rubles. per ton.

On the world market, the price of Russian wheat increased by $ 9 to $ 248 per ton, following grain from other countries. Thus, a contract for wheat with delivery in December on the stock exchange in Chicago rose by 5.7%, to $ 231 per ton, which was the maximum since November 2014, says Sovekon. One of the possible factors is the fears of market participants about dry weather in the USA and the Russian Federation, which could negatively affect the harvest in 2021. Igor Pavensky, head of the Rusagrotrans think tank, says prices are largely supported by a large purchase from Pakistan, which has already agreed to supply 1.15 million tonnes of wheat by the end of the year, including 930,000 tonnes of Russian origin at an estimated price of around $ 245-250 per tonne (FOB).

According to Sovekon’s director Andrei Sizov, wheat in Russia will continue to rise in price in the short term, reflecting the increase in quotations on the world market, but the rate of growth in prices will slow down against the background of the strengthening of the ruble and the expected slowdown in exports from Russia since November. From the beginning of the season to October 15, Russia exported 15.7 million tons of grain, which is 1% more than a year earlier.

Meanwhile, against the background of record prices for wheat in the Russian Federation, Sovecon is expecting new appeals from grain consumers (millers, bakers, livestock breeders) to the Ministry of Agriculture with requests for new measures to regulate the grain market.

Such an initiative has already been made by the Russian Poultry Union (see Kommersant dated October 15). The head of the National Meat Association, Sergei Yushin, notes that the rise in prices for grain and other components of production in the context of a decrease in average wholesale prices by 5% year-on-year put pig farmers in a difficult situation, which is partially supported by the growth in domestic demand and exports. But the outdated factories, whose profitability depends more on grain prices, are in a more difficult situation and some of them may leave the market, he adds. And about. Alexey Lyalin, President of the Russian Union of Bakers, confirms that the situation in the industry is difficult and requires an integrated approach involving all stakeholders. A simple appeal to the Ministry of Agriculture will not solve the problem, it is necessary to develop support measures and recommendations for market participants, which could be used by enterprises in different regions, he says. But, Andrey Sizov doubts that the Ministry of Agriculture will take additional steps to regulate the grain market in addition to the planned introduction of an export quota in 2021. The Ministry of Agriculture also said that they expect to stabilize prices through this mechanism. But the more pressure on the regulator in this matter, the higher the risks of new restrictive measures, says Mr. Sizov. At the same time, the expert adds, the expectation of relatively new measures to regulate the grain market in Russia may be one of the factors that supports the growth of prices for wheat in the world today. Sergei Yushin expects that rush purchases of wheat from a number of countries will end in the near future and grain prices may even begin to decline. As noted by Igor Pavensky, some large importers of wheat from the EU are already offering buyers $ 5-8 less than current prices.

Source: Kommersant.ru

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