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Russia's plans to regulate domestic grain prices refer only to the use of subsidies for rail transport from remote regions and other previously used mechanisms, the Agriculture Ministry said on Friday. Russian news agencies earlier quoted Agriculture Minister Dmitry Patrushev as saying the ministry aimed to regulate domestic grain prices to maintain stability on the local market.

The comment put some market players on alert as there has been ongoing speculation that Russia could limit exports later in the 2018/19 season which started on July 1. The minister was referring to domestic grain price regulation only in terms of railway subsidies and similar previously used mechanisms, the ministry told Reuters, when asked how it would regulate the market.

From February, the ministry will organise state subsidies for grain supplies by rail from Siberia to the European part of Russia. These have been used periodically since 2017. Russia, the world's largest wheat exporter, has been closely monitoring activity of its main exporters for the 2018/19 marketing season which started on July 1 due to a lower 2018 crop.

Russia harvested a grain crop of almost 113 million tonnes in 2019, and taking into account domestic consumption and carry-over stocks, "I think that we can allow about 42 million tonnes of exports," Patrushev told reporters on the sidelines of an agriculture conference in Berlin, Interfax news agency said.

The number matches the ministry's previous forecast for Russia's 2018/19 grain exports. "That said, we will focus on improving the quality of our grain in future years and - most importantly - we will regulate prices in the domestic market," Patrushev was quoted as saying.

He said that he did not expect domestic grain prices to rise in the medium term. The ministry has also previously said it planned to resume sales of grain from state stockpiles soon to increase domestic supplies and keep prices stable. Russian domestic grain prices have been steady in the last couple of weeks.

Copyright Reuters, 2019


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