March 31, 2011

 

Russia government sells 808,709 tonnes grain

 

 

In a bid to control price rises caused by a severe drought last year, the Russian government has sold 808,709 tonnes of grain in its first 13 intervention tenders launched this year, a data from an exchange showed on Wednesday (Mar 30).

 

The sales began on February 4 in response to rising grain prices, after last summer's drought cut the harvest by more than a third to 60.9 million tonnes.

 

Russia, formerly the world's third-largest wheat exporter, banned grain exports from August 15 to July 1 last year and announced the sale of 2.5 million tonnes of grain at intervention tenders in the first half of this year.

 

The USDA forecasts that Russia will experience a feed grain shortage of 2.5 to three million tonnes by April to May, and local experts last month said they expect Russia to import one million tonnes of grain this year.

 

The Russian government had said they 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 latest Russian 2011 grain sale intervention tender volumes and prices, based on data supplied by the National Mercantile Exchange (NAMEX), are as follows:

 

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$210) per tonne.

 

The starting price for third-grade wheat purchased in 2008-2009 was set at RUB6,600 (US$232) per tonne for the Urals and Siberian Federal Districts, at RUB6,050 (US$212) 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$210) per tonne.

 

For Moscow and several regions of the Central Federal Districts, as well as Perm region in Northern Urals and for the exclave of Kaliningrad the price for third-grade wheat was set at RUB7,535 (US$264) per tonne.

 

The starting price for fourth-grade wheat for the Central and North-Western Federal Districts was set at RUB6,875 (US$241) per tonne.

 

Fifth-grade feed wheat, milling rye and feed barley are offered at a starting price of RUB6,000 (US$210) per tonne regardless of the region. All prices include a 10% value-added tax.