16.01.2014

Russian grain exports to Egypt to revive in 2014 -producer lobby - RTRS

Russia's Grain Union expects domestic prices to fall Sees Russia's Jan.-Feb. grain exports at up to 2 mln T Head of union says winter grains are in fabulous condition


MOSCOW, Dec 26 (Reuters) - Russia's grain exports to Egypt, the world's largest wheat importer, may revive in 2014 due to a fall in Russian domestic prices and less active supply from other producers that export via the Black Sea, the head of Russia's Grain Union said.

Egypt, traditionally the largest buyer of Russian wheat, lost the top place to Turkey in the current 2013/14 marketing season as Russian wheat was too expensive to be competitive.

"The structure of our supplies has changed, and Turkey became the number one," Arkady Zlochevsky told reporters on Thursday in Moscow. "But Egypt can return to the first spot towards the end of the season."

The country's domestic prices have been supported this season by the lack of high quality wheat, a government restocking programme and by rains that delayed the crop.

Farmers also priced their wheat out of world markets when they limited sales in early November, anticipating further price increases. (Full Story)

Russian grain exports will revive in March helped by a domestic price decrease, while supply from other wheat exporters via the Black Sea - Ukraine and Romania - will decline, Zlochevsky said.

"Domestic prices should stop rising and then fall... I expect prices to decline towards the end of January, their rise has already slowed down," he said.

He expected Russia's 2013/14 grain exports to be 23 million tonnes, of which about 16 million tonnes would be exported between the start of the season on July 1 and the end of December.

The country's grain exports will be between 0.5 million and 1.0 million tonnes per month in January and February, according to the lobby's forecast.

Prices for Russian wheat with 11.5 percent protein content rose $1 to $299 a tonne in the Black Sea on a free-on-board (FOB) basis last week compared with a week earlier, SovEcon agriculture analysts said in a note. Delivery FOB requires a seller to deliver goods on board a vessel designated by the buyer.

Chicago wheat WH4 fell to a fresh 19-month low on tepid exports and plentiful wheat supplies on Dec. 24, while March milling wheat BL2H4 in Paris was at 206.25 euros ($280) a tonne.

Russia has harvested 91.3 million tonnes of grain by clean weight, including 52.1 million tonnes of wheat, in 2013, according to official data. The weather has been favourable so far for next year's harvest.

The country's winter grain plantings are in a better state than ever and may offset some of a decrease in sown acreage, Russia's state weather forecaster said this week, enhancing the possibility of a good harvest in 2014. (Full Story)

"The current condition (of winter grain plantings) is fabulous, I don't remember them being in such a good condition (in previous years)," Zlochevsky said. He expects Russia's carryover stocks at 13 million tonnes towards the end of June.

($1 = 0.7317 euros)