Purchases of grain in the state intervention fund of the Russian Federation will begin in August, according to the Ministry of Agriculture.
“Next month, the Ministry of Agriculture will start building stocks of food wheat and rye. As part of state interventions, this year it is planned to purchase up to 1 million tons of grain in the regions of Siberia, the Urals and Central Russia,” the ministry said in a statement.
According to the Ministry of Agriculture, in the coming years, the volume of the fund will be increased to 3 million tons. In the future, in the event of a sharp rise in prices, grain will be sold to Russian flour mills and bakeries (commodity interventions). This will allow the market to „cool down” and maintain a stable situation, according to the Ministry of Agriculture.
As reported, the National Commodity Exchange (NTB, part of the Moscow Exchange group) on Monday began accrediting participants in exchange trading during government procurement interventions in the grain market.
Purchases to the intervention fund will be carried out on basic assets: soft wheat of the 3rd and 4th classes, rye – not lower than the 3rd class. Earlier, the Ministry of Agriculture approved prices for purchasing and commodity interventions in the grain market.
The United Grain Company (OZK, state agent for grain management of the State Fund) is holding tenders for the selection of custodians of grain that the state will purchase.
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 is aimed at stabilizing prices on the grain market and supporting agricultural producers. With a sharp rise in prices, the state sells grain from the state fund and thereby stops the rise in price, with a fall in prices, it removes excess grain from the market in order to stop its cheapening.
This year, it is also planned to start purchasing sugar for the state fund.