November 2, 2009

The Russian government has asked state grain trader United Grain Company to rework its plan to export grain from government stocks at a discount this year, according to a report by the Kommersant business daily on Friday (Oct 30).

The United Grain Company presented Thursday (Oct 29) a draft of its plans to sell up to four million tonnes of grain at a 33 percent discount to the price at which the government bought it at 2008-09 intervention tenders.

The UGC also intends to start exporting grain from the government stocks in 2010-11. The company may start exports this year if there is a government decision, said UGC general director Sergei Levin.

UGC aims to export six million tonnes of grain in 2011 and to increase export volumes of 16 million tonnes by 2015, or 30 to 40 percent of the volume it expects Russia to export in 2015. But heavy investment is needed to develop grain storage and port facilities in order to achieve this target.

First Deputy Prime Minister Viktor Zubkov refused to approve the plan and asked UGC to rework it by December 20, Kommersant said.

The current draft is a basic one that requires many improvements, according to Zubkov.

The government bought 9.627 million tonnes of grain from domestic producers at intervention purchases in 2008-09 aimed at supporting domestic prices after a bumper 2008 crop of 108 million tonnes.

But actual volumes that were supplied by sellers to the government-appointed silos amounted to 8.06 million tonnes.