MOSCOW: Russian analysts said on Monday some exporters are having trouble buying grain to honor urgent contracts, including deals with top buyer Egypt, but Cairo and shippers said there is no problem with exports to the country.
A Moscow-based trader said producers were offering wheat at prices above those seen in Cairo.
"It is true that prices at which producers offer wheat are a bit higher than those at which Egypt buys," a Moscow-based Western trader said. "But the contracts have to be honored."
"If exporters are short and want to execute their contracts they have to pay. This seems to be a market issue rather than a shortage issue," a European trader agreed.
The Institute for Agricultural Market Studies (IKAR) and SovEcon agricultural analysts on Monday quoted traders as saying that some grain exporters had difficulty finding grain to honor urgent contracts as producers wanted higher prices.
"Domestic exporters experience difficulties finding wheat to honor export contracts, especially with Egypt," IKAR said in a weekly note.
"Producers are unwilling to deliver at the existing CPT (including delivery to) port (prices) and are asking for higher values," it said.
"Market players say some exporters have begun experiencing difficulties with honoring contracts in time and, as a consequence are ready to pay 200-300 roubles ($6.75-$10.13) per ton above (the CPT prices)," SovEcon agricultural analysts said.
They said that exporters’ prices have not moved notably and most buyers in Novorossiisk keep declaring milling wheat CPT prices at 4,600-4,700 roubles ($155.3-$158.7).
Egypt, traders said contracts are safe.
Egypt’s main government wheat buyer said on Monday Russian wheat shipments were on their way to Egypt and there were no problems shipping supplies.
Nomani Nomani, vice chairman of the General Authority for Supply Commodities (GASC), told Reuters Russia is unlikely to have supply shortages because it has huge quantities of wheat.
Out of the winners of the last four GASC tenders contacted by Reuters, the Bunge, Nidera and Valars trading houses all said they did not have problems with finding grain to ship to Egypt. Glencore declined to comment.
After a brief hiccup in sales to Egypt last year in a row over the quality of certain cargoes, Russian wheat has quickly resumed its dominant position of recent years in supplying the North African country.
"I think this story is true. It is an issue with farmers who are not willing to sell at current weak internal Russian prices," one European trader said.
"There is a hope in the Russian internal market that exporters will become short after strong recent exports and so will become more willing to pay higher prices."
Another trader said that Russia appears to have sufficient wheat available. "But Russian domestic prices are firm and are not following the international price weakness."
FOB Novorossiisk wheat with bug damage of up to 1 percent and protein content of 11.5 percent remains basically unchanged at $171, while wheat with higher bug damage is priced around $165-$166 per tonne, IKAR said.
Domestic grain prices were either stable or declining slightly, analysts said.
Oilseed and vegetable oil prices continued to decline, following the international trend, they said.
White sugar prices fell last week following declining world prices. By the end of the week prices eased to 23,000 roubles per ton from 23,600 and to $775.5 from $807.7, both Krasnodar ex-mill. –Additional reporting by Sherine El Madani in Cairo and Michael Hogan in Hamburg.
