Grain Producers Search For Place to Store Bumper Crop

Russia will move grain from the Central Federal District after storage space ran out and exports were little changed from a year earlier.

The country is running out of storage capacity for corn, wheat and barley after the best harvest in at least 15 years, while falling grain prices and a lack of port and rail capacity prevent it from increasing exports beyond 25 million tons a year.

"We need to transfer considerable amounts of grain from the Central Federal District" to preserve the crop, Grain Union president Arkady Zlochevsky said Monday. The Grain Union consists of the biggest producers and traders.

The Central Federal District has about 8 million tons of surplus grain, and there is not enough storage capacity for about half of it, Zlochevsky said. At least 2 million tons need to be transported to northwest Russia or the Volga region, where there are storage facilities and consumers, he said.

Russia has room to store about 95 million tons in its silos, according to the Grain Union. This year's grain crop totaled about 100 million tons, according to the ministry.

The government may lower railway tariffs for grain shipments in order to relocate the surplus grain, Grain Union vice president Alexander Korbut said by telephone.

Grain exports since July 1 have exceeded 10 million tons, little changed from the previous season, the Agriculture Ministry said Monday.

Russian grain exports are declining as global prices drop, Zlochevsky said. The government may begin subsidizing exports as early as January, giving a boost to overseas shipments, he said.

A decline in grain prices slowed last week as the government bought wheat, rye and barley to support farmers, the ministry said.