Igor Pavensky, Head of the department of market analysis of strategic marketing department of CJSC Rusagrotrans, reported that in July 2011 Russia will not provide any record supplies of grains from the country after cancellation of the grain embargo.

Grain export shipments can be estimated at the level of 1.5-1.7 mln tonnes, although at first the volume was expected to total 2 mln tonnes, said I.Pavensky.

According to the expert, the forecast of grain exports in July 2011 is lower compared to July 2010, when the index totaled 1.94 mln tonnes. During half of July 2011, the deliveries can be realized through small ports and border crossings. At the same time, I.Pavensky expects for the growth in proportion and volume of rail traffic in grain exports compared to the last year.

Reduction of grain prices on the world market and the absence of Russian grains at international tenders became the reason for decrease of the forecast volumes.

Last week, the indicative price of Russian 4-grade wheat of the new harvest decreased by 20 USD/t to the level of 255 USD/t (FOB Novorossiysk) and 240 USD/t (in the small ports). According to I.Pavensky, in such terms of the domestic prices, purchasing of grains for export trading is not profitable even with the VAT refund.

On the domestic market grain prices also decreased, especially in the south, where these days the harvesting campaign begins. The demand in wheat fell as grain exporters and processors formed the necessary monthly stocks. As a result, the price of 4-grade wheat in the south decreased by 300 RUR/t - to the level of 5800 RUR/t, in Siberia – 5500 RUR/t, in the Black Earth region - 5700 RUR/t.

According to the Federal State Statistics Service (Rosstat), as of June 1, grain carry-over stocks in Russia (including the intervention fund) totaled 19.08 mln tonnes against 23.9 mln tonnes on the same date last year.

AgriMarket.Info