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IKAR in Mass Media

Russia govt may start buying grain next week

19 августа 2008 года

MOSCOW, Aug 11 (Reuters) - Russia's government is preparing to buy grain from domestic producers as early as next week and has set aside nearly $1.3 billion for the intervention purchases, the Agriculture Ministry said on Monday.

Grain purchases, designed to support domestic prices as Russia harvests what some analysts say could be its biggest wheat crop in 30 years, are likely to start in the south of the country, Agriculture Minister Alexei Gordeyev said.

"The earlier they start, the lower the chance prices will decline drastically," Moscow-based analyst group SovEcon said.

The Russian government buys grain -- essentially milling wheat and rye, although purchases could also include feed grains this season -- when market prices fall too low. It sells from its intervention stocks when prices are on the rise.

It started buying grains after a bumper 2002 crop of 86.6 million tonnes, and purchases continued in 2005 and 2006 at levels below 2 million tonnes each year. The government sold grain in 2004 and in 2007-08.

"The Agriculture Ministry will complete all the necessary financial and technical procedures and, in a week's time, the grain purchases may start," the ministry quoted Gordeyev as saying in a statement.

He said the government had allocated about 30 billion roubles ($1.26 billion) for the purchases.

Gordeyev said Russia might increase its official forecast for this year's crop -- currently no less than 85 million tonnes -- in the last 10 days of August. He did not say by how much.

Some analysts believe Russia may harvest up to 90 million tonnes of grain this year. SovEcon has said the 2008 crop could include as much as 54.2 million tonnes of wheat, which would be the highest level since 1978.

HARVEST PROGRESS

In a separate statement, the Agriculture Ministry said Russia had harvested 52.7 million tonnes of grain so far, 12.7 million tonnes more than by the same date last year.

Harvesting has been practically completed in the Southern Federal District and is just starting in the northwest of the country, as well as Siberia, the Urals and the Far East.

Gordeyev said Russia would not have an excess of milling grain this year, but that he expects a good crop of feed grain.

This year, the government has said it may buy up to 5 million tonnes of grain, including feed grain.

In March, the ministry proposed its top price for benchmark third-grade milling wheat at 5,100 roubles ($213.7) per tonne in the European part of Russia and 5,000 roubles in the Urals, Siberia and the Far East.

Prices for the main traded cereal, lower fourth-grade milling wheat, were set at 4,900 roubles for the European part of the country and 4,800 roubles for the rest of Russia.

The Institute for Agricultural Market Studies (IKAR) said third-grade milling wheat was trading at 5,800-5,900 roubles at the end of last week and fourth-grade at 5,400 roubles, basis ex-silo southern Russia -- a slight increase from a week ago.

The Agriculture Ministry set its maximum purchase rice for grade A milling rye at 3,900 roubles per tonne, irrespective of the region of origin.

It has yet to set prices for feed grain.

Source: Reuters  |  #grain   |  Comments: 0   Views: 52

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