Russia Begins Grain Intervention Purchases

Russia Monday began grain intervention purchases, the agriculture ministry said. Trading is being carried out by state-owned United Grain Company. The first trading session resulted in the purchase of 5,400 metric tons of wheat from a farmer at RUB3,300 ($113.6) a ton, which is considered to be a good market price, the ministry said.

The agriculture ministry said Russia’s grain harvest to Nov. 2 was 101 million tons in bunker weight, and the harvest in clean weight would be 7-8% less than that.

If the prices remain at their current level, the ministry said, it would be able to purchase from farmers 3 million tons of grain in the current marketing year. The total sum allocated for grain intervention purchases is RUB9.5 billion (about $328 million).

The agriculture ministry said it wasn’t possible at this time to determine if the allocated amount of money was sufficient for purchasing the entire amount of grain on offer from farmers, but the money would be enough to stabilize the domestic grain market and ensure good prices for farmers.

Source: CME Group