Russia's Agriculture Ministry should succeed with its aim to buy 1.5 million tonnes of grain for state stocks on the domestic market by the end of 2015 after recently raising the price it was willing to pay, analysts and traders said on Monday. "They will do it: their prices are currently very attractive for the Siberian market," a trader told Reuters.
Russia, one of the world's largest wheat exporters, aims to buy 1.5 million tonnes of grain on the domestic market by the end of 2015 and 500,000 more tonnes of grains in January-June 2016, according to the ministry. Siberian prices are generally lower than those in some other parts of the country due to the high costs of transporting the grain to major domestic and export destinations.
The Ministry, which currently has 1.83 million tonnes of grain in its stocks, has said previously that Russia should have no less than 3.5 million tonnes of grain in them. It has already bought 420,792 tonnes of grain for the stocks since the start of the 2015/16 marketing year on July 1. The bulk of grain was bought in the last two weeks when it raised prices by 1,000 roubles ($15.5) per tonne. The ministry is now offering 10,900 roubles ($169) per tonne of third-class wheat and 10,400 roubles per tonne of fourth-class wheat.
According to the SovEcon agriculture consultancy, Siberian market currently offers third-class wheat at around 10,750 roubles per tonne in average. The ministry's purchases will be very close to its plan even if it does not manage to reach the 1.5-million-tonne level, according to Andrey Sizov, the head of SovEcon.
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