The United Grain Company (UGC) will become an agent for grain interventions again

The Ministry of Agriculture encountered no aspirants to the role of the agent for making state grain interventions for 2014 beside the current one – the UGC, 50% minus 1 share of which are owned by the Summa group. The bidding declared by the Ministry was ruled not completed, according to the site of official purchases. If the UGC documents pass the formal check for compliance with the client’s requirements (scheduled for today), the company will once again sign the contract with the State. So says Acting Head of Antitrust law group of the Law Firm "YUST" Radmila Nikitina.

The Ministry of Agriculture was prepared to pay to the winner a maximum of 620 million roubles (initial price), insurance, transportation, taxes and additional expenses included. Acting on the premises of the information contained on the file of the state purchases, the UGC did not lower the initial price and placed the bid for 620 million roubles, says the lawyer. Spokesman for the UGC Oleg Bykov confirmed filing of the bid but refused comments as to the amount.

The functions of a state agent for interventions include making official purchase and merchandise interventions until the end of 2014, placing reserves of the intervention fund and safeguarding the grain. Merchandise interventions in the Russian grain market aim at regulating the market: if there is lack of grain, the State sells it, if there is an excess – it buys grain. This year’s interventions were over by early August, and just above 1,2 million tons of grain remained in the intervention fund by the end of the month. However, those tasks are not new for the UGC: the company, since the moment of its creation in 2009, has acted as an agent for grain interventions. The FSUV “Agency on regulation of the foodstuff market” performed similar functions before that, and the UGC was created on its base.

Rosselkhozbank (RSHB) was mentioned as a possible contender. Deputy Prime Minister Arkady Dvorkovich mentioned in May that the bank could be used as an official agent. At that time, a spokesman for RSHB said that the bank was ready for the agent’s intervention functions and was equipped with all the required resources. The spokesman’s office of RSHB did not respond to the query by Vedomosti.

Arkady Zlochevsky, President of the Russian Grain Union, believes that the management of the bank has studied the situation and concluded that it was, after all, not prepared to undertake new functions. Zlochevsky is convinced: “The UGC possesses all required methods that are approved by the Government. Obviously, it would not assign to other companies. Besides, the bank has not the team prepared to solve new tasks”.

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