The Russian government has set support prices for 2010/11 grain purchases at levels lower than a year ago, when prices were higher, an order published by the Agriculture Ministry on Thursday showed. The government buys grain if prices decline and sells it if they rise. Intervention purchases begin when prices decline below levels set by the government every year in the end of March.
It is not clear when the government may resume grain purchases, as it had accumulated nearly 10 million tonnes of cereals in its intervention stocks and now has problems in disposing of them and emptying packed storage facilities. In November 2009 - February 2010 the government bought 1.78 million tonnes of grain, mainly wheat, for a total of 7 billion roubles ($237.7 million) out of 9.5 billion earmarked for the season's purchases.
For the 2010/11 season it has set top purchase prices for benchmark third-grade milling wheat to be delivered to silos in the Central, North-Western, Southern, North-Caucasian and Volga Federal districts (except for the Orenburg region in the Volga district) at 4,200 roubles per tonne versus 5,500 roubles a year ago.
Lower price fourth-grade wheat was priced at 3,600-3,800 roubles depending on the district, down from 4,800-4,900 roubles a year ago and milling rye was priced at 2,900 roubles per tonne irrespective of the destination, down from 3,900 roubles. All prices include delivery to state-appointed elevators and a 10 percent Value Added Tax.
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