Grain Sales of From the State Reserves will be 1.5 Million Tons in 2018
OREANDA-NEWS Russian Prime Minister Dmitry Medvedev ordered to sell up to 1.5 million tons of grain from the intervention Fund in the domestic and foreign markets. The corresponding order was published on Monday on the website of the Cabinet of Ministers.
"The signed order made a decision on the implementation in 2018-2019 of wheat, rye and feed barley from the stocks of the intervention Fund, purchased during the state procurement interventions in 2008-2016, in the domestic Russian market and (or) for export in the amount of up to 1.5 thousand tons," - said in an explanatory note to the document.
Agricultural products offered for sale are sold at prices not lower than market prices. The funds will be sent to the Federal budget, the government said.
The Ministry of agriculture of the Russian Federation on October 3 announced the end of export sales of 500 thousand tons of grain from the state Fund, accumulated during grain interventions. In addition, it was reported that at the same time the issue of additional sale of 1.5 million tons of grain. This should balance the expenses of the Federal budget for servicing the reserves of the intervention Fund and have a regulatory impact on the market, the Department noted. Sale of grain is planned to be carried out mainly from the subjects of the southern, Volga and other Federal districts, in which there are significant reserves of grain of the intervention Fund.
The last time the auction for the sale of grain for export took place on September 27. According to the Ministry of agriculture, from June 20 to September 27, NTB volume of transactions under the contracts amounted to 499.1 thousand tons of grain, or 99.8% of the planned sales of 500 thousand tons. After that, by the decision of the Ministry of agriculture, the sale of grain was stopped.
In Russia since 2001 the mechanism of purchase and commodity (for sale) interventions of grain works. State interventions are used to stabilize grain prices and support farmers.
At high harvest intervention purchases allow to remove the surplus from the market and to stimulate the growth of prices - it allows farmers to avoid loss. Commodity, on the contrary, are designed to lower prices in lean years with the help of infusion of grain from the state Fund to the market.
In the last year, however, representatives of the Ministry of agriculture called the purchase of grain in the intervention Fund less effective tool compared to export support.