November 14 2002, 12:18 Vedomosti

Russia: main competition between intervention trades participants sprang up in Siberia

Intervention trades for grain purchases have been held in on-line regime on seven trading floors, scattered between Moscow and Novosibirsk. It was mainly farmers and regional scale traders, who were involved in the struggle for the right to sell grain to state. According to President of Russian Grain Union Arkadiy Zlochevskiy, main competition between trades participants sprang up in Siberia, where the cheapest grain is located (because of remoteness from export frontiers). Local grain producers received an opportunity to sell grain to the state at a higher price than they can currently get from traders. For instance, first trading mini-session for the right to sell 55,000 tonnes of 3rd class wheat to state with a delivery to elevators of Novosibirsk region and Altai was closed at the mark of 2,150 roubles per tonne, while current market price in the region is 2,050 roubles per tonne.

Opinions of market participants concerning possible outcomes of interventions have split. "If trades come off in full volume, the price for the 3rd class wheat will have risen for 300 roubles per tonne by the end of 2002", - Anton Malinkin, Vice General Director of Rusagro grain company thinks. Malinkin has also noted that main interest of traders lies in West Siberia, where difference between the market price and that, established the by government, reaches 800 roubles per tonne.

General Director of company "Razgulyay-Zerno" Aleksey Ivanov also thinks that one should not expect big sales in central region and in the south of Russia. "Razgulyay" has provided none elevator for interventions this year. He thinks that effect from interventions will last for just three or four months, and till the start of planting, when free grain stocks will be thrown into the market again, the prices will go down.

(1 USD = 32 roubles)