April 1 2005, 11:27

Russia: import rice stuck up in ports because of government departments' incoordination

According to Russian newspaper Business, imports of grain commodities to the country have lately become seriously troubled, and if the situation does not change, it might soon become an obstacle for grain export from the country as well.

The situation has been caused by expiry of State Bread Inspectorate's (governmental organisation, responsible for issuing permissions for operations with grain commodities) activities in the country's large port venues. In early March the decision was made about prolonging the Inspectorate's activities in large port cities until March 31, but its licence nevertheless expires since April 1.

Even though the Inspectorate was permitted to work in ports through the whole March, importers of grain commodities have had problems with their business during that month. Thus, Director of Commercial Department of Angstrem company Oksana Linnik told the reporter that her company had not been able to take the imported rice out of the port since the middle of March , because the Bead Inspectorate's branch in Vladivostok had issued permission for import of the grain into the country, but refused to issue quarantine certificates without providing any explanations. On this reason the company is not able to transport the goods on the railway.

"They have recently started to issue "conventional permits", Ms. Linnik says. "But this allows only transporting the goods, not selling."

"Our load - a 2,000-tonne rice shipment - was demurred in Vladivostok for about two weeks. Our clients did not receive the goods on time and, hence, lost the money", explains Anton Molochkov, Manager for rice trade of Masan-Trading company.

According to estimates of market participants, during three weeks there have been about 120,000 tonnes of rice, accumulated only in Far Eastern ports, while each day of storing 30 tonnes of the product costs the importer about 1,000 euros.

"We are unable to sell the goods and are losing 100,000 roubles each day", Ms Linik says.

As regards grain exports, Marketing Director of International Grain Company Nikolay Demyanov explains: "Exporters earlier raised the question [with governmental authorities] of solving the situation with State Bread Inspectorate, and now our activities have been partially restored. But we don't know what's going to happen next. Until the governmental resolution, which was to be signed in late March, is finalised, we are in a "suspended" state."

He thinks that the importers should take the same measures too. Oksana Linnik says the importers are going to apply to government with an official letter.

The officials of Rosselkhoznadzor (governmental authority for supervision over operations with agriproducts) refused from the comments.

Analysts suppose that the licence for Bread Inspectorate's work in large ports will be prolonged, but the situation with imports will nevertheless remain unsolved.

"The draft resolution about transferring the function of State Bread Inspectorate [to another state-authorised body] is under development, and it is unlikely to be signed in the nearest time", Vice President of Russian Grain Union Alexander Korbut says. Another market expert, wishing to remain unnamed, supposed that signing of the resolution was prevented by disaccords between Finance, Agriculture and Economy Ministries.

"To cap it all, the governmental bodies received no funds for the reorganisation", said the respondent.