July 8, 2008

Russia to set up state-controlled grain exporter

The Russian government has approved the formation of a state-controlled grain exporting company which is expected to control up to half of Russian grain export by 2011, the Agriculture Ministry's press office reported Monday (July 7, 2008).

In the 2007-2008 marketing year, Russia's grain export exceeded 12 million tonnes worth an estimated US$4.5 billion-US$5.5 billion.

Russia's grain export is expected to rise to 25-30 million tonnes in the next three to four years, half of which would be handled by the new trading company.

The new grain trading company would be a version of the federal food market's regulating agency, which acts for the government in grain purchasing and market interventions.

The Agriculture Ministry is proposing to include in that company 28 other existing grain trading companies in which the government has partial stakes.

The state intends to reduce its share in the new company to 25 percent plus one share, while the remaining 75 percent will be sold to private Russian grain trading companies.