Voluntary Report - public distribution

**Date:** 5/21/2004

**GAIN Report Number:** RS4028

RS4028

**Russian Federation**

**Agricultural Situation**

**Grain and Products Price Update**

**2004**

**Approved by:**

![](media/image1.wmf)Allan Mustard

American Embassy, Moscow

**Prepared by:**

Yelena Vassilieva and Dorothy Adams

**Report Highlights:**

Grain prices have been decreasing since their peak in February, but
bread and grain product prices continue to rise, fueled by the high
costs of fuel, electricity, and rental payments.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Moscow \[RS1\]

\[RS\]

# Grain Prices

Grain prices have been decreasing since peaking in February. This price
decrease accelerated in April based on a good crop forecast, decreasing
international prices, a slight decrease in freight rates, the desire of
grain owners to get rid of stocks on the eve of the new crop (harvesting
will start in mid-June in the southern parts of Russia), and the desire
of grain traders to push farmgate prices down. The average regional
offer prices for grains throughout the nation are shown in table 1
below.

## Table 1 Average Regional Offer Prices for Grains

  ---------------- --------- ------- ---------- ------- -------- ------- -------- ------- -------- -------
  Economic Regions January           February           March 19         April 16         May 7    
                   16                20                                                            

                   Rubles    USD     Rubles     USD     Rubles   USD     Rubles   USD     Rubles   USD

  **Milling                                                                                        
  Quality Wheat,                                                                                   
  3rd class**                                                                                      

  Central          5567      192.8   6533       229.2   6550     229.8   6167     215.5   6017     207.8

  Central Black    5664      196.1   6319       221.7   6369     223.5   6060     211.7   5865     202.6
  Earth                                                                                            

  Volga Valley     5625      194.8   6350       222.8   6367     223.4   6094     212.9   5819     201.0

  North Caucasus   5792      200.6   6300       221.1   6392     224.3   6000     209.6   5733     198.0

  Ural             5070      175.6   6225       218.4   6306     221.3   6008     209.9   5850     202.1

  West Siberia     5317      184.1   6385       224.0            0.0     6192     216.4   6067     209.5

  **Milling/Feed                                                                                   
  Quality Wheat,                                                                                   
  4th class**                                                                                      

  Central          4917      170.3   6183       216.9   6192     217.3   5933     207.3   5733     198.0

  Central Black    4622      160.0   5900       207.0   6080     213.3   5860     204.8   5650     195.1
  Earth                                                                                            

  Volga Valley     4700      162.7   5988       210.1   6038     211.9   5844     204.2   5538     191.3

  North Caucasus   4550      157.5   6067       212.9   6033     211.7   5742     200.6   5367     185.4

  Ural             4433      153.5   5763       202.2   5838     204.8   6008     209.9   5583     192.8

  West Siberia     5200      180.1   6000       210.5   NA       NA      5975     208.8   5708     197.1

  **Feed Quality                                                                                   
  Wheat**                                                                                          

  Central          5300      183.5   5517       193.6   5733     201.2   5600     195.7   5458     188.5

  Central Black    5130      177.6   5500       193.0   5750     201.8   5525     193.0   5440     187.9
  Earth                                                                                            

  Volga Valley     5167      178.9   5544       194.5   5756     202.0   5550     193.9   5288     182.6

  North Caucasus   5000      173.1   5625       197.4   5825     204.4   5400     188.7   5100     176.1

  Ural             5017      173.7   5357       188.0   5633     197.6   5333     186.3   5300     183.1

  **Rye, Food                                                                                      
  Quality**                                                                                        

  Central          5133      177.7   5733       201.2   5733     201.2   5450     190.4   5300     183.1

  Central Black    4833      167.3   5667       198.8   5717     200.6   5450     190.4   5200     179.6
  Earth                                                                                            

  Volga Valley     4763      164.9   5400       189.5   5538     194.3   5269     184.1   4388     151.6

  Ural             4267      147.7   5100       178.9   5217     183.1   5025     175.6   4775     164.9

  West Siberia     4700      162.7   5150       180.7   NA       NA      5200     181.7   NA       NA

  **Feed Barley**                                                                                  

  Central          3550      122.9   4325       151.8   4325     151.8   4042     141.2   3867     133.6

  Central Black    3657      126.6   4311       151.3   4293     150.6   3856     134.7   3700     127.8
  Earth                                                                                            

  Volga Valley     3533      122.3   5544       194.5   4550     159.6   4044     141.3   3850     133.0

  North Caucasus   3967      137.4   4500       157.9   4550     159.6   4125     144.1   3850     133.0

  Ural             3600      124.7   4167       146.2   4183     146.8   4075     142.4   3900     134.7

  **Ruble/USD                28.9               28.5             28.5             28.6             29.0
  exchange rate**                                                                                  
  ---------------- --------- ------- ---------- ------- -------- ------- -------- ------- -------- -------

Source: "Unidell", "Agronews"

# Bread and Grain Products Prices

Despite falling grain prices, process for bread and grain products
(except for groats) continued to rise in April and May, but at a slower
pace. Data for these months is not available, but March data (Table 5)
illustrates the slowing rate of increase. The price of wheat flour
increased by 4.7 percent, the price of rye and wheat bread increased by
1.6 percent, and the price for white bread increased by less than 1
percent. A month ago (February 2004), prices climbed by 6.6 percent, 3.5
percent, and 3 percent respectively. Only rice and pasta prices grew
faster. After the election, the political hullabaloo surrounding prices
ceased and post-election price increases are the result of the high
costs of fuel, electricity, rental payments, and other inputs supplies
used by bakeries and mills. Sales interventions to flour mills also
played a role in the slowdown in the bread price increase.

## Table 2. Russia's Average Flour, Bread, Cereals and Pasta Prices, Rubles per 1 kg

  -------------------- ------- ----------- ------------- ------- ---------- --------------
                       Wheat   Rye and     Bread and     Rice    Millet     Pasta
                       flour   wheat-rye   bakery                (groats)   (vermicelli)
                               bread       products made                    
                                           of wheat                         
                                           flour                            

                                                                            

  March 2000           7.56    6.65        8.08          14.79   6.50       14.88

  March 2001           8.38    8.27        9.67          12.97   7.09       15.78

  March 2002           8.40    8.79        10.27         14.03   7.21       17.03

                                                                            

  March, 2003          7.99    9.38        10.84         15.88   11.61      17.19

  April, 2003          8.04    9.52        10.99         15.86   12.60      17.27

  May, 2003            8.22    9.77        11.30         15.81   13.61      17.39

  June, 2003           8.84    10.26       11.92         15.81   14.54      17.60

  July, 2003           9.35    10.47       12.21         15.83   15.85      17.89

  August, 2003         9.57    10.59       12.36         15.84   17.18      18.10

  September, 2003      9.82    10.93       12.80         15.89   18.14      18.27

  October, 2003        10.65   11.58       13.53         15.96   18.14      18.47

  November, 2003       11.11   11.86       13.84         16.12   17.42      19.18

  December, 2003       11.40   12.07       14.05         16.30   16.76      19.43

  January, 2004        11.79   12.76       14.79         16.55   16.23      19.83

  February, 2004       12.57   13.21       15.23         16.99   15.61      20.44

  March, 2004          13.16   13.42       15.37         17.70   15.26      20.86

                                                                            

  Mar. 03 to Mar. 04,  64.71   43.07       41.79         11.46   31.44      21.35
  percent                                                                   

  Jan. 04 to Mar. 04,  11.62   5.17        3.92          6.95    -5.98      5.19
  percent                                                                   

  Feb. 04 to Mar. 04,  4.69    1.59        0.92          4.18    -2.24      2.05
  percent                                                                   
  -------------------- ------- ----------- ------------- ------- ---------- --------------