Russian wheat exporters, who failed to win any business in Egypt's latest buy tender, are gradually being priced out of the export market, though prospects for renewed sales depend on price swings abroad, analysts and producers said.
The Institute for Agricultural Market Research (IKAR) said Russian wheat was offered at $293 per tonne on a delivered basis in the latest tender held by Egypt's General Authority for Supply Commodities and was beaten out by US wheat.
GASC said on Saturday it bought 55,000 tonnes of US soft red winter wheat from Venus at $262 per tonne with freight costs of $27 per tonne, undercutting Russia, and the Egyptian buyer said US wheat would likely remain competitive.
GASC is by far Russia's largest wheat buyer.
Based on the offer levels, IKAR pegged Russian export wheat with 12.5 percent protein content at $275 per tonne on a free-on-board (FOB) basis but said Russian export prices were in "total disarray".
"At the same time, the bulk of physical shipments are currently ongoing for old contracts which Russian exporters won at only $244-250 per ton," IKAR said.
"Taking in mind all circumstances, current 12.5 percent protein Black Sea FOB is estimated at $275 per tonne," IKAR said.
It is much lower than parity domestic farmers expectations, which makes future (Russian) exports questionable until the end of the season."
A possible export duty to regulate grain exports had been under discussion in some parts of the government, but a higher-than-expected final harvest figure of 93.9 million tonnes persuaded officials to forgo limits for the time being.
The government had been expected to allow maximum exports of 24-25 million tonnes for the 2011/12 crop year, but Russia's top agriculture official, said the forecast for Russia's exportable surplus had been raised to 27 million tonnes.
The Grain Producer's Union, an industry lobby chaired by the head of a Siberian producer, issued a statement praising the government's effective decision to raise the limit on duty free exporters, saying the domestic market would rebalance to prevent excessive exports.
"For the foreseeable future, there is no basis for administrative limits on exports," Union head Pavel Skurikhin, chairman of Novosibirsk-based SAHO, said in the statement.
Skurikhin said Russia risked fresh damage to its reputation on international markets, whose confidence in Russian supplies was shaken in 2010 when the government banned exports during a catastrophic drought, leading to some cases of force majeure.
