Ag Min: Russia to find new grain intervention tool in 2–3 weeks

VLADIVOSTOK, Sep 6 (PRIME) -- The Russian government will agree on a new state grain market intervention mechanism – needed because of plans to privatize the current agent United Grain Company (UGC) – in two or three weeks, Agriculture Minister Alexander Tkachyov said at the Eastern Economic Forum on Wednesday.

“The government must be actively present on the grain market, I think that the decision will be made in the next two-three weeks,” Tkachyov said, adding that the new agent must be “controlled by the Agriculture Ministry or Russian Agricultural Bank, or some other corporation, but its activities must not be curbed in any case.”

CEO of Summa group Leila Mammedzade said that Summa wants to participate in privatization of UGC and supports its loss of the state grain intervention agent status.

“The intervention fund has functions of a regulator and we agree with the government that any regulatory function must belong to the government rather than a private company,” Mammedzade said.

Tkachyov said that the ministry expects that the grain harvest at 110 million tonnes in 2017 although weather-related risks are high. “We stay with a figure of 110 million tonnes and are not reducing it, of course.”

The minister said that Russia plans to export 30 million tonnes of wheat in the 2017–2018 agricultural year.

“Out of 40 million tonnes of grain that we plan to export in the next agricultural year, wheat will account for 30 million tonnes,” Tkachyov said.

He said that Russia is actively cooperating with Bangladesh, Iran, Argentina, Brazil and China in wheat supplies. “And we hope for very large supplies to China and Mongolia and naturally, the north of Africa is very interesting to us as well.”

The ministry plans to order the purchase of about 3 million tonnes of grain from the domestic market to the state grain fund or an alternative measure encompassing a nearly 100% reimbursement of costs on grain railway traffic to ports in the south of Russia.

“The second idea is in the works today, it is subsidizing railway tariffs for grain transportation by virtually 100%, in particular from the Volga, Urals and Siberia regions to the southern ports first of all,” Tkachyov said.

“We have the key facilities there, in order to cut the tariff to zero and make grain profitable for traders grain not only from the south of Russia but from other territories as well.”

End