State grain purchases for intervention fund start in Russia on Oct 29

MOSCOW. Oct 29 (Interfax) - State grain purchases for the state intervention fund begin in Russia on October 29.

The interventions proposed by the Agriculture Ministry aim to support farmers amid a decline in demand for grain due to problems with export logistics in the Azov-Black Sea basin. The holding of state purchases was supported by President Vladimir Putin.

Interventions may amount to up to 3 million tonnes, the Agriculture Ministry. The state agent for holding them is United Grain Company (UGC). Trading will be conducted on the National Mercantile Exchange (NAMEX) in an auction format. "The price range is set from top to bottom: the UGC sets the maximum price, and the seller either confirms it or offers a lower price, competing with other participants. The best price wins, the contract is concluded automatically, the seller delivers the grain to an accredited elevator, and UGC transfers funds to the seller's bank account," the exchange said.

According to the summary statement of the auctions, purchases may amount to 18,900 tonnes on the first day of trading. The starting price for grade 3 wheat is set at 11,000 rubles per tonne (excluding VAT), and for grade 4 wheat at 10,800 rubles.

A similar level of purchases is envisaged for the auctions scheduled for November 2.

As UGC told Interfax, 18 elevators have so far been approved for storing grain purchased under the interventions. "Inspections of grain storage capacities are continuing. In addition, some storage operators are correcting deficiencies identified during inspections. The list of basis points will change," the company said.

The fund currently holds 3.7 million tonnes of grain. The government has allocated an additional 5 billion rubles to service the grain held in the fund.

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.

Procurement auctions last occurred in the first half of 2024, and commodity auctions occurred from August 2024 to June 2025.