June 4, 2010

The Russian market will face very unfavourable terms for grain trading in the next two years, especially taking into account present grain stocks of the intervention fund, declared the Ministry of Agriculture.

Experts' indicated the unstable situation on the world market and rather large carry-over stocks of grains on the domestic market of the country.

At the end of the season (June 31, 2010), the world carry-over stocks of grains will total 193 million tonnes, up 28 million tonnes compared to the same period of the last year.

According to data of the Federal State Statistics Service, on May 1, the grain stores totalled 29.5 million tonnes, up 14.4% compared to the previous year indices. The main grain stores are located in the Volga, Urals and Siberian Federal Districts, where agricultural producers have difficulties with grain sales. In the Central and Southern Federal Districts the situation shows better trends.

The intervention fund stocks rather essential part of carry-over reserves or 9.7 million tonnes.

Elena Skrynnik, the Minister of Agriculture, informed that she appeals all regions of the country to change the structure of crop rotation. According to her, agrarians should not hope for selling grains to the intervention fund, the government still searches for other mechanisms, the Minister also reminded that servicing of the intervention fund costs to the budget of nearly RUB 1 billion (US$0.03 billion) per month. Also, she noticed that grain selling should be realised for consumption aims and on the basis of long-term contracts.