November 30, 2010

Local grain price hikes likely to oblige Russia to import grain

Grain price hikes in the domestic Russian market may force it to begin grain imports, stated the country's Prime Minister, Vladimir Putin, Monday (Nov 29).

"If necessary, when we see that prices are growing, we'll implement those agreements (on imports) and channel additional grain supplies to the domestic market," Putin said.

Russia has earlier imposed a temporary ban on grain exports while the country's Agriculture Ministry said it was negotiating grain purchases from Ukraine and Kazakhstan.

Putin said that he had agreed with some of his counterparts from the countries which had not suffered from the drought or suffered less than Russia that they would set aside necessary grain volumes.

The prime minister said he thought that the current domestic market grain prices of RUB6,500-7,000 (US$207.13-$223.06) per tonne were good enough for agribusiness.

He added that the government had "enough instruments to restrain (grain) prices". "We should avoid sharp food price jumps," the prime minister said.

According to Putin, grain sales from the country's intervention fund were yet another measure to restrain price growth. "We'll determine the date of sales and take appropriate measures on the market," he said.