Russian Farmers Allowed to Buy Their Grain Back From Intervention Fund Dec. 26, 2013
Russian Prime Minister Dmitry Medvedev signed Order No. 2290-p of December 6, 2013, that allows farmers who sold grain from their 2013 crop into the State Intervention Fund in the Fall of 2013, to purchase their grain back again. They would be able to purchase it at the price they sold it minus the cost of storage, insurance and taxes. The farmers would be able to buy their own grain directly from the Intervention Fund without participation in the special government intervention sales through the commodity exchange. The basic legislation on government grain intervention allows sales/purchases of grain from/to the Intervention Fund only through auctions at the authorized commodity exchanges. According to the Russian Ministry of Agriculture, one of the benefits of allowing this buy-back, is if grain market prices continue to climb, then these famers can buy out this grain in the spring of 2014, sell it for higher prices, and receive some additional operating capital for spring sowing and field work.
As of December 25, 2013 Russian farmers had sold into the Intervention Fund 544,050 metric tons (MT) of 2013 crop grain, including 287,685 MT of milling wheat Class 3; 108,540 MT of milling wheat Class 4; 46,575 MT of fodder wheat Class 5; and 101,250 MT of fodder barley. The total value of purchased grain was 3,210 million Rubles (~$97.6 million). The intervention purchases (of 2013 crop supplies) began on October 15, 2013 for Siberian producers, when the market price of grain in Siberia was well below the market price of grain in other parts of the country, and below the state purchase prices. However, since October 2013 the market prices of grain in Siberia have been increasing:
--The market price of Class 3 wheat increased from 5,983 rubles ($181) per MT on October 18, 2013, to 6,150 rubles ($186) per MT in mid-December
--Class 4 wheat increased from 5,500 rubles ($167) per MT to 5,783 rubles ($175) per MT
--Class 5 increased from 4,950 rubles ($150) per MT to 5,350 rubles ($162) per MT
--Fodder barley increased from 5,144 rubles ($156) per MT to 5,488 rubles ($166) per MT.
As of December 25, 2013, the average intervention purchase prices that included VAT and overhead expenses were 6,218 rubles ($190) for Class 3 wheat, 6,012 rubles ($184) for Class 4 wheat, 5,684 rubles ($174) for Class 5 wheat, and 4,979 rubles ($152) per 1 MT of fodder barley. The increase in grain market prices in Siberia have led to decreasing sales into the Intervention Fund