March 6, 2012

To be sold from intervention stocks in the European part of the country during planned sales by the state, Russia can export up to 1.5 million tonnes of grain, a government source said.

"From the European part of Russia, where prices are high, we can sell (grain through interventions) and send it for export," the source told Reuters.

Exports from state stocks in the Asian part of the country are unlikely as transport bottlenecks between Siberia and the key export outlet of Novorossisk are a persistent obstacle, while Pacific ports are unable to handle large volumes of grain.

In the European part of the country, state intervention stores hold about 2.4 million tonnes of different types of grain. Some of them are made up of feed grain earmarked for domestic consumers.

"Part of the food grain from this (total) volume can be exported. I think there is an opportunity in the range of 1-1.5 million tonnes," the source believes.

These possible grain sales from state intervention stocks could put a brake on the uptrend on the domestic market, given the large volume of government grain stocks, which SovEcon estimated last week at 6.7 million tonnes.

The source was unable to predict when the government could start to sell grain from its intervention stocks and declined to estimate the total volume of possible sales. SovEcon said it was unlikely that intervention sales start not earlier than in the end of March.

The Russian government has bought 415,530 tonnes of milling wheat so far this year at intervention tenders aimed at supporting prices in regions located far from export ports, data supplied by the exchange in charge of the tenders showed last week.

Russia is expecting another big wheat harvest in the coming crop year but it is unlikely to match this year's record grain exports, partly because of a big decline in wheat stocks.