Bloomberg News

Russia Lacks Export Wheat in South, Pushing Up Prices, Ikar Says

January 24, 2012

Jan. 24 (Bloomberg) -- Russian supplies of milling wheat available for export from the Southern Federal District declined, pushing up prices, the Institute for Agricultural Market Studies said.

“We see a stormy price increase because grain resources are becoming limited in the south,” Oleg Sukhanov, the institute’s grain analyst, said today by phone from Moscow. “This forced exporters to search for grain in other regions, including central Russia, Volga, Ural areas and Siberia.”

Free-on-board prices at the Black Sea port of Novorossiysk rose 6 percent to $260 a metric ton over the first 20 days of January, the institute, known as Ikar, said.

Higher transportation costs for grains brought to port from more distant areas are driving up prices for fourth-grade milling wheat, Russia’s main export grain, Sukhanov said. That’s contributing to an increase in global wheat prices, he added. Wheat futures rose 2.1 percent to $6.1725 a bushel on the Chicago Board of Trade in the past week.

Russia exported more than 19 million tons of grain, including 15 million tons of wheat, from the start of the marketing year on July 1 to Jan. 20, according to the institute.

In 2011, Russia harvested 93.9 million tons of grains after drying and cleaning, according to Agriculture Ministry data. This year, the crop may be at least 90 million tons, according to Sukhanov.

--Editors: John Deane, Dan Weeks

To contact the reporter on this story: Marina Sysoyeva in Moscow msysoyeva@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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