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Ag. Min. Sets Up State Grain Trader
A state company will become Russia’s largest seller of grain when the state-owned company OAO Agency for the Regulation of Food Prices is reorganized. Authorities foresee 40-50 percent of all Russian grain exports going through the company by 2011. The transformation will begin this year. The Agency for the Regulation of Food Prices was known as the Federal Agency for the Regulation of the Food Market before it was reorganized as a joint stock society. Until recently, it served as the state agent in grain purchases and was responsible for market intervention. Russia exported 12.65 million tons of grain in the 2007-2008 season, worth $4.5-5.5 billion. That volume is expected to grow to 25-30 million tons by 2011.
The Agriculture Ministry’s concept for the Agency for the Regulation of Food Prices is to transfer stock from 28 companies with state shares to it. That is expected to take place in August. The companies involved will include the Novorossiisk Bread Products Combine and six grain elevators, including Budenovsky in Stavropol and Palasovsky in Volgograd. The approximate value of the stock to be transferred to the authorized capital of the Agency for the Regulation of Food Prices is $300-400 million.
An Agriculture Ministry source said the government is discussing whether or not to allow commercial structures to enter into the company’s authorized capital and maybe take a package of up to 75 percent minus one share. Russian companies already active in that sector will be given priority. Yug Rusi, OGO and Siberian Agrarian Holding have already received proposals from the Agriculture Ministry. OGO chairman Ilya Karpov said that specialists from that company were hired to serve as consultants for the concept.
Today, six companies, International Grain Co. (the Russian subsidiary of Glencore), Agrika, Rosinteragroserivs, Yugtranzitservis, Yug Rusi and Aston, account for 60 percent of Russian grain exports. “So far, it’s not very clear whether Agency for the Regulation of Food Prices will enter the market as a regular commercial player or whether we will witness the monopolization of the export market,” remarked one trader. Egypt, India and Morocco are the main export markets for Russian grain.
www.kommersant.com
All the Article in Russian as of July 07, 2008
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