Volga Baikal AGRO NEWS Update on the Grain Purchasing for the RF State Fund !!!
The RF Ministry of Agriculture plans to start purchasing grain for the state fund in August.
Grain purchases for the state intervention fund will begin in August, – the Ministry of Agriculture said.
The department clarified that food wheat and rye will be purchased for the fund. As part of state interventions, this year it is planned to purchase up to 1 million tons of grain in Siberia, the Urals and Central Russia. In total, in the coming years, the volume of the fund will be increased to 3 million tons. This corresponds to the 2-3-month requirement of processors.
“In the future, in the event of a sharp rise in prices, grain will be sold to Russian flour milling and baking enterprises. This will allow the market to cool down and maintain a stable situation,” – the Ministry of Agriculture explained.
The mechanism of commodity (sale of grain from the state intervention fund) and procurement (purchase of grain by the state) interventions has been operating in Russia since 2001. It allows stabilizing prices on the grain market and supporting agricultural producers. The state buys grain from farmers when prices are low. This creates additional demand, and grain prices rise. And when they rise, they sell grain from the state fund: an additional supply appears on the market, and prices go down.
In 2021, it was decided to reformat the state grain fund: to focus on supporting millers – to increase stocks of food wheat and rye, but exclude corn, barley and feed wheat. In addition, against the backdrop of rising prices for sugar, it was decided to create a state fund for it. The irreducible supply of sugar should be 250,000 tons.