December 1, 2010

Russia's grain prices may grow 30% in 2011

Russia's grain prices may increase by 33% in the first quarter of 2011 to RUB9,000 (US$285.68) per tonne, up from the current RUB6,000-RUB7,000 (US$190.48-US$222.19), the president of Russia's Union of Grain Producers, Pavel Skurikhin, said on Tuesday (Nov 30).

"Grain prices may certainly grow to the level of about RUB9,000 (US$285.68) per tonne registered in the spring of 2008," Skurikhin said when asked about the grain price growth expected in the first quarter of 2011, when several regions would run out of their grain stocks.

Russia's First Deputy Prime Minister, Viktor Zubkov, has previously said that the current average price for grain amounts to RUB6,000-RUB6,500 (US$190.48-US$206.34) per tonne, while Deputy Economic Development Minister Andrei Klepach has said that average grain prices have hit RUB7,000 (US$222.19) per tonne or more.

Russia has been confronted with the problem of imbalances in grain supplies among the country's regions this season. Southern regions have a surplus of food grain (about 10 million tonnes) while central and western regions that were hit by the drought in summer are experiencing a shortage of fodder grain required to maintain the livestock sector.

"Except for the unequal grain distribution across the country and imbalances between different types of grain crops, I do not see any reasons for price hikes," Skurikhin said.