Russia to continue purchasing interventions on grain market until Dec 30 - Agriculture Ministry

MOSCOW. Dec 27 (Interfax) - Purchasing interventions on the Russian grain market will continue until December 30, inclusive, although some previously concluded contracts have been terminated.

"As of December 26, taking into account terminated contracts, 2.97 million tonnes of grain had been purchased for the state fund. Trading will continue until December 30," the Agriculture Ministry told reporters.

It was reported earlier that there are plans to buy 3 million tonnes for the state fund.

Data from the National Mercantile Exchange (NAMEX), a division of the Moscow Exchange Group , showed that 3.014 million tonnes of grain was purchased for the state fund for 45.455 billion rubles in the period from August 1 to December 26, before factoring in terminated contracts.

This included 1.512 million tonnes of Class 4 wheat from the 2022 harvest purchased for 22.38 billion rubles; 1.376 million tonnes of Class 3 wheat from the 2022 harvest purchased for 21.35 billion rubles; 49,680 tonnes of Class 3 wheat from the 2021 harvest for 777.3 million rubles; 25,500 tonnes of Class 4 wheat from the 2021 harvest for 384.5 million rubles; and 270 tonnes of rye from the 2021 and 50,490 tonnes of rye from the 2022 harvest purchased for, respectively, 3 million rubles and 559.1 million rubles.

Average prices in this period were 14,326 rubles per tonne for Class 3 wheat from the 2021 harvest; 14,190 rubles for Class 3 wheat from the 2022 harvest; 13,700 rubles for Class 4 wheat from the 2021 harvest; 13,506 rubles for Class 4 wheat from the 2022 harvest; 10,100 rubles for 2021 rye; and 10,077 rubles for 2022 rye. All prices do not include value-added tax.

The government agent in purchases is the United Grain Company.

Russia introduced the mechanism of commodity interventions (the sale of grain from the state intervention fund) and purchasing interventions (purchases of grain by the state) in 2001 with the aim of stabilizing prices on the grain market and supporting farmers. When there is a steep increase in prices, the government sells grain from the state fund, thereby curbing prices, and when prices fall it mops up excess grain from the market, thereby firming up prices.