Russia suspends grain sales amid falling prices

The Russian government has suspended grain intervention sales until sometime next week as prices fall, which may prevent it from selling planned volumes and thus raise the country's exportable grain surplus. "The trade will restart next week," an Agriculture Ministry statement issued late on Wednesday said. It did not say which day the says would resume.
Russian grain prices continued rapid falls last week and buyer's interest toward intervention tenders has shrunk, analysts said on Monday. A severe drought unseen in more than a century has cut by a third grain output of Russia, formerly the world's third-largest wheat exporter, and forced it to band grain exports from August 15, 2010 to July 1, 2011.
Government officials said that the grain export ban may be extended further. The government has announced the sale of up to 3 million tonnes of grain at intervention tenders in the first half of this year, although analysts have questioned the country's ability to sell all this volume. So far the government has sold only 815,189 tonnes of grain at the intervention tenders.
The government has said it will distribute an additional 3.3 million tonnes of grain to drought-hit regions at a low fixed price from February. Before the start of the tenders, the government had 9.6 million tonnes of grain in its stocks. Analysts have also raised doubts about smooth distibution of the government grain stocks. Russia expects to harvest up to 90 million tonnes of grain this year, which may enable it to have an exportable surplus. If the government fails to sell all grain it had intended to, the remainder will be added to the surplus, currently estimated by analysts and producers at between 7 and 15 million tonnes.