Russia's government, preparing intervention tenders to purchase domestic wheat, has set a minimum price of 3,100 roubles ($115.50) below which it would support the market, the Agriculture Minister said on Wednesday.
Alexei Gordeyev said the price applied to third-class wheat in European Russia. The government had also set a minimum price of 3,300 roubles ($123) a tonne on Siberian third-grade wheat, he told reporters. A survey of eight companies by leading agricultural analyst SovEcon in May forecast the average price of third-grade wheat at 3,071 roubles a tonne, EXW North Caucasus, by the end of August, compared with 3,317 roubles at the end of June.
Russian grain prices rose in the second half of 2005 due to a drought, high exports and government purchases and were given upward momentum when frosts early this year wiped out large areas sown to winter grain.