Russia's Agriculture Ministry not ruling out implementing non-tariff measures on grain market if harvest below this year's forecast

MOSCOW. March 7 (Interfax) - Russia's Agriculture Ministry has not ruled out implementing non-tariff measures on the grain market if the harvest is below this year's forecast.

"If grain production this year is below the forecast owing to weather conditions, then the Agriculture Ministry would promptly initiate implementing additional non-tariff measures," the ministry said.

At the same time, Russia's 2024 grain harvest ranked among the top five in the country's history, the ministry said. Total grain production including food-grade wheat is more than sufficient to meet the needs of processors.

An export quota on wheat is traditionally in place in the second half of the season, which is lower than last year's, taking into account the harvest achieved in 2024.

In accordance with a government directive, the sale of up to 3 million tonnes of grain from the state intervention fund is permitted this year, the ministry said. As of March 6, 77,000 tonnes had been sold from the fund. "This indicates that there is neither a shortage of this product at affordable prices nor a need to increase the volume of fund sales," it said.

Commenting on the situation with release prices for third-class wheat, the Agriculture Ministry said that they are currently stable. As of March 5, the average price stood at 14,700 rubles per tonne, which is below the maximum price thresholds at which state commodity interventions in the grain market are triggered. At the same time, the cost of wheat flour with producers has fallen 0.5% over the past month, to 26.7 rubles per kilogram.

No more than 13 million tonnes of wheat are required annually for the production of all domestic flour, which is significantly less than the 2024 harvest, the Union of Flour and Cereal Enterprises was quoted as saying. The sale of grain from the state fund makes it possible to influence domestic prices in cases of sharp fluctuations. However, there is currently enough grain on the market at acceptable prices, the union said.

As reported by Kommersant on Friday, Agriculture Minister Oksana Lut informed President Vladimir Putin about high risks of rising prices for food-grade milling wheat due to a decline in its production in Russia in a letter in February. The cost of grain could exceed the maximum price thresholds set at 15,600 rubles per tonne for grade 3 wheat and 15,100 rubles per tonne for grade 4 wheat, she said. If these levels are reached, the state conducts commodity interventions to stabilize prices.

Lut addressed Vladimir Putin in fulfillment of his directive from February 13, 2023. This directive was prompted by an initiative from the leader of the Communist Party faction in the State Duma, Gennady Zyuganov, who proposed increasing purchases into the intervention fund to 15 million tonnes. Purchases amounted to 944,400 tonnes in 2023-2024, Kommersant said.

As of early February 2025, the price of grade 3 wheat was 14,300 rubles per tonne, having increased 0.6% over the month and 11.3% year-on-year, Lut said. For grade 4 wheat, the increase was 1.9% and 20%, respectively, reaching 13,800 rubles per tonne.

The director of SovEcon, Andrei Sizov, said that domestic prices for grade 3 wheat in Russia currently stand at 16,100 rubles per tonne, and at 15,500 rubles per tonne for grade 4 wheat. Year-on-year, these figures have risen 24% and 48%, respectively. This is primarily due to a reduction in the harvest, he said.

According to Rosstat, wheat production in 2024 amounted to 82.6 million tonnes, compared to 92.8 million tonnes in 2023.