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Government Ready to Intervene in Grain Market
In spite of falling prices for grain, Minister of Economic Development and Trade German Gref stated yesterday that his ministry and the Agriculture Ministry would soon announce a grain intervention. “We have good reserves. We will sell grain,” Gref said on a working visit to the Russian Far East. He added that that move was necessary to halt price rises on grain, bread and flour that began last month. Agriculture Minister Alexey Gordeev stated that rising prices for bread require further consideration of a price cap.
Bread was one of the main causes of inflation in July, which came to 0.9 percent, after the Agriculture Ministry announced that the wheat harvest this year would be relatively low, prices rose on international markets, and Ukraine imposed limitations on grain exports. The price of bread rose 4-8 percent during the month, and flour rose in price by 11 percent.
Price began to fall again in the last two weeks after Rosstat and the Agriculture Ministry adjusted the prognosis for the wheat harvest to a more favorable result. Agricultural organizations have recommended against government intervention on the market in response to a query by Russian Prime Minister Mikhail Fradkov. The Federal Foodstuffs Agency has a reserve of 1.5 million tons of grain. the expected harvest is 45 million tons.
www.kommersant.com
All the Article in Russian as of Aug. 08, 2007
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