Large reserves expected to curb growth of prices for Russian grain on world market - IKAR

MOSCOW. Dec 2 (Interfax) - The large reserves of grain that could build up in Russia this year due to a record harvest and problems with exports will curb the growth of prices for Russian grain on the world market, the CEO of the Institute for Agricultural Market Studies (IKAR), Dmitry Rylko said.

"Russia is left with enormous reserves, which the whole world sees and treats shipments from our country accordingly. In other words, why pay more money for Russian supplies if in the south there are still enormous amounts of grain in the hands of our farmers, and why overpay when you can try to tamp the price and even push it down," Rylko said at the Agrotrends Russia 2022-2023 conference in Moscow on Thursday.

He said Russian wheat (FOB terms) is now $80 cheaper than U.S. wheat and $20-$25 cheaper than Romanian wheat. "The same kind of grain. Usually the price difference was $1-$2. This is what the post-sanctions reality is," Rylko said.

This factor will also curb the growth of prices on the domestic market, he said. Prices are expected to edge up in the European part of Russia, but there are a number of factors hindering this. In addition to large domestic reserves, they include a strong harvest in Australia, the higher cost of money, and signs of a looming major global recession, which is seriously hurting importers' demand for all grain in the world, including Russian, Rylko said.