Russian farmers rush to sell grain to profit from high interest rates

MOSCOW, Nov 14 (Reuters): Russian farmers appear to be changing their habit of withholding excess grain for better times amid low global prices, as high interest rates make it attractive to cash in and deposit money in banks at home, analysts said.

The Russian central bank hiked its key interest rate to 21 per cent last month, the highest level in more than 20 years, as it fights inflation in the overheated economy. Many banks are now offering short-term deposits with interest rates of up to 25 per cent.

"It is easier to sell grain right away, put it in a bank at over 20 per cent, and forget about it," Dmitry Rylko, head of the IKAR agriculture consultancy, said.

"No one is holding anything back here, quite the opposite. This year, we have no incentives to hold on to it, which is why we had such a large export," he added.

In analysts' view, the possibility of further hikes in wheat export duty in recent weeks, on top of recent sharp rises, also outweighed the benefits of holding back stocks.

While in many regions of the world, farmers are reluctant to sell grain at current prices, Russian sales are proceeding at a near-record pace.