Russia will sell up to 83% of grain from its state stockpile into the domestic market, starting on April 13, the Agriculture Ministry said on Thursday, aiming to increase supply for flour millers and bakers as coronavirus spreads.
Russia, the world's largest wheat exporter, has so far refrained from using tough grain export curbs seen in past crises, which are unpopular with sellers, but wants to ease the pressure for bakers and meat producers amid a weakening ruble.
The ministry has proposed limiting grain exports to 7 million tons from April through June because of the virus outbreak, which is close to the general market expectation. But the government has not yet approved that proposal.
The ministry, which has 1.8 million tons of grain in its stockpile, had previously planned to sell 1 million tons from it.
"In total, it is planned to send up to 1.5 million tons of grain to the domestic market to meet the needs of the flour and bakery industry, as well as the livestock industry," the ministry said in a statement.
Market players said the stockpile sale was not being seen as a step towards tightened export quotas, as the state stockpile consists of quite old grain, which the agriculture ministry bought in 2008-2016, located mainly in Siberia, far from Russia's main export ports on the Black Sea.
Russia used to put great emphasis on having a far larger stockpile, but reduced it in recent years as its annual production became more stable.
The Russian union of flour millers last week asked the ministry "to take measures to eliminate the imbalance in the formation of prices for wheat and flour" in the domestic market.
It is a logical decision to sell the stockpile taking into account flour millers' requests, said Alexander Korbut, deputy head of the Russian Grain Union. The union is a non-government farmers' lobby group.
"The increase in sales from the stockpiles seems to be an attempt to relieve tension and, above all, to restrain the prices for flour and, accordingly, bakery products," Korbut told Reuters.
The move is unlikely to be a step towards tougher grain export restrictions, he added.
