April 3, 2012

Russia to initiate two million-tonne grain intervention sales

In order to stabilise prices and replenish stocks, the Russian government on April 4 will begin two million tonnes of grain intervention sales, both milling and feed, to be sold in the Southern, North-West and North Caucasus regions, the Agriculture Ministry said Monday (Apr 2).

The ministry said grain prices in these regions increased 12% since the beginning of the current calendar year. In European Russia, one tonne of third grade milling wheat costs now RUB6,300 (US$215), one tonne of fourth grade milling wheat costs RUB6,100 (US$208), while in the southern regions the prices reach RUB7,000 (US$239) per tonne.

The regions named by the ministry are close to sea ports, and grain stocks there have been exhausted by intense export levels.

The ministry said that, considering the two-million tonne intervention sales and exports in the current marketing year of some 25-27 million tonnes, grain stocks in Russia by the beginning of the next marketing year, July 1, are likely 18 million tonnes, which corresponded to the recommendation by the Food and Agricultural Organisation that grain stocks should amount to 15-17% of a country's annual production.