February 7, 2011

Russia sells 60,075 tonnes grain via intervention

The Russian government sold 60,075 tonnes of grain on Friday (Feb 4) at the first intervention tender in 2011 aimed at containing a price surge caused by a severe drought.

The drought forced Russia, once world No.3 wheat exporter, to ban grain exports from August 15, 2010 to July 1, 2011 and to announce the sale of 2.5 million tonnes of grain at weekly intervention tenders in the first half of this year.

The government will distribute an additional 3.3 million tonnes of grain to drought-hit regions at a low fixed price from February. Before the start of the tenders, the government had 9.6 million tonnes of grain in its stocks.

The government sells grain only to flour millers, animal breeders and animal feed producers.

The starting price for benchmark third-grade milling wheat and lower quality fourth-grade milling wheat purchased in 2005-2006 was set at RUB6,000 (US$204.7).

The starting price for third-grade wheat purchased in 2008-2009 was set at RUB6,600 (US$224.80) per tonne for the Urals and Siberian Federal Districts, at 6,050 per tonne for most of the Central, Southern and Volga Federal Districts.

For these regions the starting price for fourth-grade wheat purchased in 2008-2009, was set at RUB6,000 (US$204.7) per tonne.

For Moscow and several regions of the Central Federal Districts, as well as Perm region in Northern Urals and for the enclave of Kaliningrad the price for third-grade wheat was set at RUB7,535 (US$256.64) per tonne.

The starting price for fourth-grade wheat for the Central and North-Western Federal Districts was set at RUB6,875 (US$234.16) per tonne.

Fifth-grade feed wheat, milling rye and feed barley are offered at a starting price of RUB6,000 (US$204.7) per tonne regardless of the region. All prices include 10% value added tax.