Russia to provide US$170 million in grain export aid

The Russian government is poised to launch a US$170 million package to support grain exports, and run down a stockpile that is costing about US$20 million per month to store.

The government is expected to soon confirm a plan that will subsidise the sale of some of the country's grain inventories of nearly 10 million tonnes, said an analyst from SovEcon.

The scheme would provide RUB5 billion (US$166.56 million) of support to the state-run United Grain Company (UGC) which, given weak global prices, could swallow huge losses on the 2.5 million to three million tonnes of grain Russia wants to sell this year.

Much of the grain was acquired through intervention purchases during buoyant market conditions two seasons ago. But UGC chief executive Sergei Levin said the money will be sufficient to cover only 1.5 million to two million tonnes.

The grain will most likely be sold at tenders to private merchants for exporting.