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Ministry of Agriculture published a draft order on determining the maximum levels of maximum and minimum prices for the 2021/22 season, upon reaching which grain commodity and procurement interventions may begin. The document sets price caps for 3rd, 4th and 5th grade wheat, rye, barley and corn. Prices have been agreed with the Federal Antimonopoly Service and will be the same for all regions, whereas earlier they were differentiated by federal districts.
Purchase interventions can be carried out when the minimum price for wheat of the 3rd class reaches 10.56 thousand rubles/t, including VAT, or 9.6 thousand rubles/ton, excluding VAT. It is proposed to set prices for wheat of the 4th class at the level of 9.9 thousand rubles/ton and 9 thousand rubles/ton, of the 5th class – 8.91 thousand rubles/ton and 8.1 thousand rubles/ton respectively. The proposed maximum levels of minimum prices for corn are 9.9 thousand rubles/t with VAT and 9 thousand rubles/ton without VAT, for rye and barley – 9.57 thousand rubles/ton and 8.7 thousand rubles/ton with and without VAT.
The proposed maximum level of maximum prices for wheat of the 3rd class for the possible conduct of commodity interventions is 14.41 thousand rubles per ton with VAT and 13.1 thousand rubles/ton without VAT, 4th class – 13.53 thousand rubles/ton and 12.3 thousand rubles/ton, 5th class – 11.55 thousand rubles/ton and 10.5 thousand rubles/ton. The Ministry of Agriculture proposed to establish the maximum price for the corn at the level of 12.43 thousand rubles per ton with VAT and 11.3 thousand rubles/ton without VAT, for rye – 10.45 thousand rubles/ton (9.5 thousand rubles/ton), for barley – 11.88 thousand rubles/t (10.8 thousand rubles/t).
According to the National Union of Grain Producers as of February 19, average prices for 3rd class wheat varied from 14 thousand rubles / ton with VAT depending on the federal district, 4th class wheat cost 13-16 thousand rubles / ton, 5th class – 12.5-15.8 thousand rubles / ton. The lowest prices were in Siberia, the highest – in the center of the country. Average prices for rye were 10.5-13.5 thousand rubles / ton, barley cost 10-16.15 thousand rubles / ton, corn – 13-17.25 thousand rubles / ton.
The mechanism of purchasing and commodity interventions in the grain market has been operating since 2001. The interventions are used to stabilize prices for grain crops and support farmers. When prices fall strongly, the state buys grain into the intervention fund to remove excess volume from the market, when they rise, it sells previously purchased grain to stabilize prices. According to the Ministry of Agriculture, the volume of grain in the intervention fund as of February 12 was 135.3 thousand tons. Commodity interventions in Russia are currently taking place, procurement interventions were last carried out in the 2016/17 season.
