24 Aug 2009 16:16

OOO Reserve Foodstuff Company selected state agency for grain and dry milk purchases in 2009

MOSCOW. Aug 24 (Interfax) - Russia's Agriculture Ministry has tallied the results of a tender to select a state agent to carry out purchasing and interventions on the grain and dry milk markets.

According to the state purchasing website, the winner of the tender was OOO Reserve Foodstuff Company (RPK), which is registered in the Moscow area town of Yubileiny. The company's founder is Agrompromsoyuz (Agriculture Industry Union), which unites around 70 regional agricultural unions and forty companies.

The tender's winner offered the lowest contract price coming to 1.2% for total purchases and 0.097% for storage. In addition, the company proposed the largest guarantee coming to 5.9 million rubles.

According to the terms of the tender, the maximum contract price was set at 1.4% of the value of purchased and sold production. In addition, no more than 0.1% of the cost of elevator storage is payable on a monthly basis to the agent.

The ministry will announce the start date for interventions on the 2009 harvest on August 25.

Russia introduced the mechanism of grain market intervention in 2001. The government intervenes on the market by either selling or buying grain in order to regulate prices. If prices fall sharply, the government buys grain for its Intervention Fund in order to firm up prices. When prices go up, grain is sold from the Intervention Fund in order to stabilize the situation on the market.

Grain interventions have been held three times since they were introduced - in 2001, 2005 and 2006, as well as from August 19, 2008 to May 21, 2009. The Agency for Food Market Regulation, which was transformed into the state-owned OJSC United Grain Company, acted as the state agent during these periods.

Arkady Zlochevsky, the president of the Russian Grain Union, earlier said that United Grain Company would not be participating in the state agent tender since its borrowing limit for Rosselkhozbank (RSHB) funds had been exhausted.

A state grain fund was formed in May during the close of interventions. The fund comes to 8 million tonnes.