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IKAR in Mass Media

Russia Agmin sees state buying domestic grain in Aug-Sept

27 февраля 2013 года

MOSCOW, Feb 27 (Reuters) - Russia's Agriculture Minister said the government will start laying plans to replenish its grain intervention reserves by buying up grain early in the new season, and appears likely to favour domestic over imported grain.

Agriculture Minister Nikolai Fyodorov told a meeting of the National Grain Producers' Union that the government would launch discussion in March on its strategy for intervention purchases, which are likely to get off to an early start, he said.

"My feeling is that it will be August or September," he said. Russia's new crop marketing year begins in July.

The government will be a major actor on the domestic market next year as it will have to buy almost all of the grain required to meet its aim of holding hold 4.8-10 million tonnes of intervention stocks next season.

The purchases are likely to keep pressure on grain supplies from Russia, normally one of the world's major wheat exporters, which was hit by drought last year that slashed its wheat harvest by a third to 70 million tonnes.

Following a rush to export, state intervention sales to cap prices have run down state stocks. Strategic reserves will need to be rebuilt, and that will keep the balance of supply and demand tight even if the 2013/14 crop meets official forecasts.

Weekly sales of 130,000 tonnes, aimed at cooling prices, are expected to reduce state stocks to around 300,000 tonnes by the end of the season.

Sizov said he welcomed indications from Fyodorov that the government was likely to rule in favour of domestic purchases, rather than turning to imports to plump up state stocks for the first time in around 20 years.

"I am glad they did not say they would buy import grain for the stocks, and instead would build stocks on the domestic market rather than buying from our friends in Kazakhstan."

For now, Russia is largely relying on Kazakh cross-border imports. By mid-February, the Institute for Agricultural Market Studies (IKAR) estimated Russia had imported about 650,000 tonnes of grain in the current crop year, which started July 1.

Of that figure, 350,000 tonnes was Kazakh grain, it said.

The need to replenish stocks is just one factor putting pressure on Russian grain supplies next year, even if a relatively high target of 95 million tonnes is met.

Sizov said that, combined with other negative factors such as a smaller sown area and lower stocks, Russia's supply/demand balance would be relatively tight.

He estimated 12 percent of Russia's winter crop is in poor shape, a worse figure than in previous years, including 2011/12, when Russia exported a record volume of grain.

The head of the lobby said the balance could be as tight as this season's, when the harvest fell to just over 70 million tonnes.

"Even if we hit the target of 95 million tonnes, the balance will be similar" to this year's, Pavel Skurikhin, head of the National Grain Producers' Union, told a meeting of the farming lobby group.

Russia has already exceeded its nominal exportable surplus this crop year. Fyodorov said Russia had exported 13.7 million tonnes so far compared with 20 million tonnes in the same period of the last crop year.

Source: Reuters  |  #grain   |  Comments: 0   Views: 70

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