June 22, 2007              

Russia proposes "OPEC- like" grain organisation for world grain trade coordination

Russia is suggesting to establish an international organisation similar to the Organization of Petroleum Exporting Countries (OPEC) to coordinate grain markets, the agriculture minister said Wednesday (June 21).

Russian agriculture chief Alexei Gordeyev said a kind of "grain OPEC" will establish and properly coordinate grain production and trade globally.

Ukraine's agriculture minister, Yuriy Melnik, supports the proposal, saying Russia, Ukraine, and Kazakhstan should coordinate their agricultural operations in the sector initially.

Some regions in Russia and Ukraine have been seriously affected by severe drought this year which has affected significant crops. However, Gordeyev assured grain reserves in both countries were sufficient to meet domestic demand and export obligations.

Russia and Ukraine export an average of 12 million and 10 million tonnes of grain a year respectively.

The minister said they were worried by some global market trends, particularly of the rising grain prices, adding that at the moment grain cost over US$200 per tonne.