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Prices of wheat flour generally stable and higher year on year in importing countries

12/02/2020

Export prices of milling wheat increased for the fourth consecutive month in January in the Russian Federation and in Ukraine, due to solid export demand and in line with trends in the international market, but remained lower, year on year, reflecting the good 2019 outputs. In the domestic markets, wholesale prices of wheat grain and wheat flour rose seasonally in January in Ukraine and, to a lesser extent, in the Russian Federation, but remained below or around their values a year earlier in both countries on account of good domestic availabilities. In Kazakhstan, export prices of milling wheat eased in January for the second consecutive month, but remained well above their levels a year earlier, mainly due to the below-average output obtained in 2019, following adverse weather conditions during the season. Similarly, in the domestic market, retail prices of wheat flour remained stable in January but higher year on year. In the importing countries of the subregion, retail prices of wheat flour remained broadly stable but higher than in January last year. In Kyrgyzstan and Tajikistan, although prices held steady or weakened in the past month, they remained well above their year-earlier values, mainly due to higher export quotations from Kazakhstan, the countries’ main wheat supplier. Prices of wheat flour remained virtually unchanged also in Armenia but were only slightly higher than in January last year reflecting adequate availabilities from last year’s crop. Prices strengthened somewhat in Georgia and were higher, year on year, reflecting trends in the Russian Federation’s export market, and the effect of the country’s currency depreciation. Prices remained stable in Azerbaijan in December amid good domestic supplies from the 2019 harvest and imports of wheat last year, officially reported to be about 47 percent higher than in 2018. With regard to potatoes, another key staple in the subregion, prices generally rose in January in line with seasonal trends. They increased in Kyrgyzstan and Tajikistan and reached levels well above those in January last year. Prices were higher, year on year, also in Georgia, with reduced volume and lower quality of the crop produced in the past season contributing to sustain the higher level. Prices of potatoes rose also in the Russian Federation and Armenia, but remained lower than in January 2019 on account of good domestic availabilities. In Kazakhstan, prices strengthened only slightly and were generally up on a year earlier, while in Azerbaijan, the good harvest last year contributed to a relative price stability in the past several months.