Russian govt permits sale of up to 500,000 tonnes of grain from state fund

MOSCOW. Aug 2 (Interfax) - The Russian government has authorized the sale of up to 500,000 tonnes of grain from the federal intervention fund, so-called commodity interventions, in 2024, the cabinet of ministers said in a press release.

The corresponding order was signed on August 1.

The decision should assist in maintaining a stable situation on the domestic food market, according to the press release.

Wheat purchased during purchasing interventions in 2014-2016 and 2022-2024 will be sold at exchange trades on the domestic market at prices not lower than the minimum selling price and not lower than the purchase price.

The government forms the federal intervention fund for agricultural products through purchasing interventions.

Specifically, commodity interventions, when the government sells grain from the intervention fund, and purchasing interventions, when the government buys grain from the fund, have been operating in Russia since 2001. The goal of the process is to stabilize prices on the grain market and support agricultural producers. When prices rise sharply, the government sells grain from the fund in order to mitigate the rise; and when prices drop, the government buys grain from the fund in order to remove excess product, thereby tempering the fall.

In general, market saturation assists in maintaining stability, according to the press release.