Novorossiysk: The Largest and Expensive Port for Russian Wheat
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The Ministry of Agriculture of the Russian Federation proposes to change the marginal minimum prices for Grain, upon reaching which 2023-2024, purchase and commodity interventions in the Grain market will be carried out. According to the draft order of the department, posted on the website regulation.gov.ru, the proposed price levels are lower than those approved by order of March 23, 2023. In addition, the period for which these prices are determined is changing. It is proposed to be installed from August 1, 2023, to June 30, 2024. The current order is listed from July 1, 2023, to June 30, 2024.
Thus, the price for Wheat of the 3rd class is proposed to be set at 15,620 rubles (186.3 USD) per ton with VAT (17,820 rubles in the current order) and 14,200 rubles per ton without VAT (16,200 rubles). For Wheat of the 4th class – 14,960 rubles (16,830 rubles) and 13,600 rubles (15,300 rubles) per ton, respectively; for rye not lower than the 3rd class – 11,220 rubles (12,650 rubles) and 10,200 rubles (11,500 rubles) per ton, for Barley – 13,310 rubles (14,630 rubles) and 12,100 rubles (13,300 rubles) per ton.
Prices for carrying out commodity interventions are also lower than those provided earlier. So, for Wheat of the 3rd class – 17,160 rubles per ton with VAT (19,580 rubles), 15,600 rubles per ton without VAT (17,800 rubles), for Wheat of the 4th class – respectively – 16,500 rubles (18,480 rubles) and 15,000 rubles (16,800 rubles) per ton, for rye – 12,320 rubles (13,970 rubles) and 11,200 rubles (12,700 rubles) per ton, for Barley – 14,630 rubles (16,060 rubles) and 13 300 rubles (14,600) per ton without VAT. Prices apply to all regions of the Russian Federation.
The mechanism of the commodity (sale of Grain from the state intervention fund) and procurement (purchase of Grain by the state) interventions has been operating in Russia since 2001. It is aimed at stabilizing prices in the Grain market and supporting agricultural producers. With a sharp rise in prices, the state sells Grain from the state fund, thereby stopping the price increase; with a fall in prices, it removes excess Grain from the market to prevent cheapening. Previous Grain interventions were purchasing. They were held from August 1 to December 30, 2022. Three million tons of Grain were purchased for more than 47 billion rubles.
In terms of the port volumes, Novorossiysk led others with 2.1 million tons of Wheat in May 2023, followed by Kavkaz (1.7 million tons), Tuapse (0.2 million tons), and Taman (0.15 million tons), according to the AgFlow data. Total shipments hit 16.2 million tons in Jan-May 2023.
Russian Grain Prices
In the week from 06/09/23 to 06/16/23, Russian indicative prices (FOB FM) were as follows:
- Wheat – dropped to $247.80/t (-2.29%);
- Barley – decreased to $182.20/t (-2.25%);
- Corn – decreased to $207.50/t (-4.02%);
The Russian Wheat index, CPT Novorossiysk, rose to 14,569 rubles/t (+4.19%). Prices for Russian Wheat (protein 12.5%, FOB FM) fell to $238.25/t (-$12.75/t), and Corn fell to $220.5/t (-$7.5/t).
Domestic Russian purchase prices for grade 4 Wheat, protein 12.5%, at port elevators of the Black and Azov Seas for the reporting period were:
- Azov – 13,000 (+900) RUB/t
- Novorossiysk – 14,500 (+800) RUB/t
- Rostov-on-Don – 13,000 (+900) RUB/t
- Taganrog – 11,700 (0) RUB/t
- Taman – 12,800 (0) RUB/t
The tariff quota for Grain export from the Russian Federation is divided into primary and additional parts, followed by the Government decree. According to the document, within ten working days from its entry into force (June 15, 2023), the volume of an additional part of tariff quotas for Wheat, meslin, Barley, Corn, and rye should be formed.
Other sources: ZERNO
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