The devaluation of the ruble and relatively high grain prices have bolstered Russian farmers’ confidence, with the average price for wheat on the domestic market soaring by 1,000 rubles ($12.3) reaching almost 13,300 ($164.6) per ton over the week, Kommersant writes.
The primary reasons for the spike in grain prices are a substantial drop in the ruble and high global prices, according to Andrei Sizov, Director of the analytical agency SovEcon.
The expert says that despite market declines, grain prices on world stock exchanges have been climbing. Russian wheat prices stood at $207 per ton after a steep drop in prices. The global market likewise reacted to the ruble’s plunge and rumors about potential restrictions on grain exports, the agency said.
Igor Pavensky of analytical agency Rusagrotrans agrees that, despite the volatility of the ruble exchange rate, far from all manufacturers are ready to hold stocks, and so trading continues.
In turn, ProZerno Director General Vladimir Petrichenko noted that many grain holders have taken a wait-and-see attitude. “It is still unknown at what price they will have to purchase, for example, imported crop protection agents,” he said.
Petrichenko was confident that domestic wheat prices would continue to rise. He noted, however, that the growth would depend on the ruble exchange rate and export prices.
At the same time, Andrei Sizov does not exclude that the rise in price of grain in the domestic market will lead to increased pressure on the Ministry of Agriculture from the main consumers, mills and livestock breeders, with the aim of introducing any restrictions, Kommersant writes.