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Russian wheat prices rise as wet weather slows harvest

Russia’s wheat export prices rose last week thanks to healthy demand from foreign importers and poor weather slowing the country’s harvesting campaign, according to analysts.

Russia, one of the world’s leading wheat exporters, had harvested 33.4 million tonnes of wheat from 44 per cent of its planted area as of Monday. It hopes to increase the crop by one third to at least 50 million tonnes after last year’s drought.

Russian prices for wheat supplies with 12.5 per cent protein content strengthened slightly to $254 per tonne in the Black Sea on a free-on-board (FOB) basis at the end of last week, the Institute for Agricultural Market Studies (IKAR) said in a note (all figures US$).

SovEcon agriculture analysts said prices for wheat with an 11.5 per cent protein content had risen around $3 to $249-253 per tonne in deepwater ports.

An improvement in domestic prices could pose a problem for Russian exporters with French grain looking increasingly competitive, SovEcon added.

“The competition between Black Sea exporters and French wheat is escalating. Against the background of harvest delays, a limited supply of quality wheat and the rise in domestic prices… Russian exporters are now in a difficult situation,” SovEcon analysts said in note.

Russia’s 2013 grain output will be lower than previously estimated, IKAR said, predicting production of 89.7 million tonnes, down from 91.7 million tonnes, including wheat output of 51.8 million tonnes.

On the rapeseed market, flagging demand has pushed offer prices down to 10,000-10,500 roubles (US$300-$320) per tonne from 10,400-10,800 roubles per tonne on excluding works (EXW) in the North Caucasus region, according to SovEcon.

Meanwhile, the wet weather delayed Russia’s white sugar harvest also, boosting South Russian white sugar prices to $729 per tonne from $722, IKAR said.

— Reporting for Reuters by Alessandra Prentice in Moscow.

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