Page 118 - RusRPTJul21

9.1.6 Agriculture sector news
Russia to start purchasing up to 3mnt of grain for intervention fund from 2022, but it could become additional mechanism to cap prices
The Deputy Minister of Agriculture, Oxana Lut, has stated that Russia is to start the purchase of up to 3mnt of grain for its intervention fund in 2022. This reserve is to be formed during the next two years.
The intervention fund was introduced in 2001 as a measure to balance prices on the market, and was last used in 2016. Currently, the fund stands at 200,000t, less than 0.4% of annual consumption. The proposed amount of 3mnt constitutes 4% of the consumption, and might offer additional leverage to cap the prices of grain.
IKAR forecasts the grain harvest at 127mnt, implying a 5% YoY correction from 133.5mnt in the previous season (which almost matched the record high). The agency also estimates that export volumes could decline 3% YoY in the next farming year to 48mnt. Both figures would imply robust results, some 2% and 4% above the five-year average.
Aside from the intervention fund, grain sector has two other initiatives aimed at stabilising the pricing environment. The first is the floating tariff, introduced effective from today, and is calculated as 70% of the
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