Weaker rouble brings Russian wheat back to export markets

MOSCOW, Nov 3 (Reuters):  Russian wheat has returned to export markets after several weeks of absence thanks to a weak rouble and higher world prices, offering a bright spot for an economy hurt by Western sanctions and tumbling oil revenue.

Russia's international grain revenue is modest compared with its top foreign earner, energy, and the exportable surplus of wheat is running low.

Nevertheless, the resumed wheat deals after a lull in September, along with high domestic prices, will help to boost farmers' earnings, easing their demand for loans from state banks which are under the sanctions.

GASC, the state buyer of Egypt, the world's top wheat importer, said last week that it had bought Russian wheat at $256.43 per tonne on a cost and freight (C&F) basis for shipment late next month.

Rising demand at home has pushed up domestic prices despite a near-record crop, making Russian wheat too costly for customers in North Africa and the Middle East in September.

However, the rouble has suffered a further slide in October, falling 12  per cent against the dollar and meaning it has lost more than a fifth of its value since the start of the year.

This, along with a rise in global prices, has restored Russian wheat's international competitiveness and reopened the door to exports. The sanctions, imposed over Moscow's role in the Ukraine crisis, do not cover very short term finance, allowing traders to obtain letters of credit and continue business.