December 22, 2008

Russia will hold grain intervention tenders five days per week instead of three in a bid to increase purchases of grain surplus and support prices, according to the National Mercantile Exchange (NAMEX) on Friday (Dec 19).

The first auction will be held on Monday (Dec 22) instead of Tuesday (Dec 23) as previously planned, said NAMEX.

Russia is estimated to have harvested 105.5 million tonnes of grain this year, the largest crop since 1992. Analysts and the grain industry projected Russia to have a grain surplus of 30 million tonnes.

Russia's export target for the 2008-09 crop year that started in July, was 20-25 million tonnes.

Russia has already exported nearly 11 million tonnes of grain, mostly wheat, since the start of the season. The government has also examined subsidies for exports of another 10 million tonnes in the first half of 2009.

Some analysts are skeptical about the subsidies as the government has recently increased the volume of grain purchases to about 20 million tonnes from the previous 10-11 million tonnes. The government has also increased the funding of the purchases to nearly RUB3 billion from the previous RUB1.3 billion, and it has promised to start purchasing corn in addition to the current buying of wheat, barley and rye.

The Russian government has bought 3.74 million tonnes of grain between August 19 and December 18 for a total of RUB17.85 billion.

First Deputy Prime Minister Viktor Zubkov said only 1.5 million tonnes of grain have been delivered to government-appointed grain silos so far, though some critics have voiced the concerns of insufficient grain storage facilities in the country.