February 23, 2011

Russia to allocate three-million-tonne fodder grain to regions

The Russian government has decided to distribute around three million tonnes of fodder grain from the intervention fund to regions that request assistance, said First Deputy Prime Minister Viktor Zubkov.

Regional companies are supposed to purchase the grain at a price of RUB4,000-5,000 (US$136.59-$170.73) per tonne, Zubkov said, adding that the price did not include tax or transportation expenditures.

The government has also decided to continue selling around three million tonnes of food grain from the intervention fund on a commodity exchange, Zubkov said.

The Agriculture Ministry started selling grain from the intervention fund on a commodity exchange in early February and planned to sell 2.5 million tonnes of grain within the first six months of 2011 to stabilise grain prices. The government also planned to directly distribute two million tonnes of grain as a result of requests from various Russian regions.

Meanwhile, Russian President Dmitry Medvedev then called for a temporary suspension of all grain intervention sale tenders amid corruption concerns, while ordering an analysis as to which mode of intervention-exchange trading or the distribution of grain to regions most affected by severe drought-was more efficient.

The government is also considering further extending the ban on grain exports after July 1, Zubkov said. The government banned grain exports in August 2010 as a result of a severe drought.

Russian Agriculture Minister Yelena Skrynnik said earlier in February that the government could lift the ban in October once the grain harvest for 2011 has been properly calculated.