Russia to sell three million tonnes of grain inventories domestically

Russia's Agriculture Ministry plans to dispose one-third of the government's huge grain inventories worth RUB16 billion (US$510 million), offering it through cheap loans domestically.

Agriculture Minister Yelena Skrynnik told Prime Minister Vladimir Putin the ministry wanted the government to offer the grain to animal breeders and grain processors for five years.

The ministry wants to dispose of about three million tonnes of grain out of 9.64 million tonnes in government stocks, of which about a third is feed grain.

The receivers of the grain will have to repay its value to the government through the state-run Russian Agricultural Bank with interest, part of which will be compensated by the government. An extra RUB700 million (US$22 million) will be needed for this.

Russia has so far allowed the state grain trader, The United Grain Co, to sell up to one million tonnes of grain from the stocks.

The Russian government has bought most of its stocks to support farmers after bumper crops of 108 million tonnes in 2008 and 97 million tonnes in 2009.