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Russian wheat prices rise after major Egyptian purchase

Russian wheat prices rose last week as Egypt, the largest buyer of grain from the country, made a major purchase, industry analysts said on Monday, adding that Siberian local prices saw an unusual spike due to demand from Kazakhstan.

Egypt’s state grain buyer bought 465,000 tonnes of wheat in an international purchase tender last week. The purchase comprised of 345,000 tonnes of Russian wheat and 120,000 tonnes of Ukrainian wheat.

Black Sea prices for Russian wheat with 12.5% protein content were up $1 to $207 per tonne on a free on board (FOB) basis at the end of last week, agricultural consultancy IKAR said in a note.

SovEcon, another agricultural consultancy in Moscow, said wheat prices were up $1 to $208.5 per tonne. Barley was steady at $187 per tonne.

Russia exported 19.0 million tonnes of grain, including 16.6 million tonnes of wheat, between the start of the 2019/20 season on July 1 and Nov. 14, SovEcon said. Total grain exports were down 15% compared to the same period the previous year.

Prices for third-class wheat in European parts of Russia rose 50 roubles to 11,225 roubles ($176) a tonne on the domestic market by the end of last week, SovEcon said. That price was on an ex-works basis, which excludes delivery costs.

Prices in Siberia for third-class wheat rose sharply – by 200 roubles – reaching 10,700 roubles per tonne amid strong demand from Kazakhstan which shares a free customs zone with Russia, SovEcon said.

There are concerns of additional strong demand from Kazakhstan coming later in the season, it added, which could limit supplies for the local area.

Russian farmers have already sown winter grains for next year’s crop on 103.9 percent of the originally planned area, or 18.2 million hectares.

“Despite the recent dryness, crop conditions are generally good thanks to some rains and warm temperatures which helped crops to develop before the winter,” SovEcon said. “However, current low moisture reserves imply that fields will need more precipitation during the winter and spring.”

Sunflower seed prices fell by 25 roubles to 15,500 roubles a tonne, SovEcon said. Domestic and export prices for sunflower oil were steady at 41,750 roubles a tonne and $680 per tonne, respectively.

IKAR said its price index for white sugar from southern Russia rose by $1 to $288 a tonne as of Nov. 15.
Source: Reuters (Reporting by Olga Popova and Polina Devitt; writing by Polina Devitt; editing by Kirsten Donovan)

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