An intervention sugar fund may appear in Russia

It is anticipated that such a fund could be used to regulate sugar prices.

And this is a kind of alternative to the fixed price agreement, which expires today, June 1st.

The said agreement successfully «kept» sugar prices for several months.

According to him, the price per kilogram in wholesale could not be increased by more than 36 rubles, in retail — 46 rubles.

But today the agreement between retailers and manufacturers is no longer valid.

Some people fearfully expect that sugar prices will «break off the chain» and may go off scale in the near future.

It was at this time that the Ministry of Agriculture proposed to the Russian government to create a new instrument for regulating prices — an intervention fund.

How will it work?


The principle is simple: in September-October, immediately after the sugar beet harvest, the fund will purchase sufficient quantities of sugar (presumably — up to half a million tons).

This is approximately a monthly volume of sugar consumption within the country.

Then, as needed (when prices need to be lowered), the fund will sell sugar to the market.

All this will make it possible to regulate sugar prices without resorting to any external «borrowing».

This year, while there is no intervention fund, Russia had to buy 350 thousand tons of sugar in the EAEU countries, opening the possibility of duty-free import.

Currently, the idea of ​​creating a fund is only being discussed. According to experts, the proposal is not bad, especially if you use only Russian sugar to «fill» the fund, without resorting to imports.

At the same time, the fund does not solve all the problems, since the sugar beet harvest varies from year to year.

And if there is a crop failure, then there will be a shortage of sugar.

“It is necessary to buy sugar for the fund when it is relatively cheap, and you need to be prepared in advance mentally and financially for the fact that the state will have to suffer certain losses in operations with the intervention fund. You need to understand how the sugar market functions, and make purchases and sales on time, «says Dmitry Rylko, General Director of the Institute for Agricultural Market Studies.

However, even if the fund is created, it will be able to fully earn only after a new harvest of sugar beets.

To hold out until the fall, without allowing an explosive rise in prices, is now the most difficult task.

After all, the agreement on fixed prices has already been canceled, the fund has not yet been created, and there is simply nowhere to import sugar into the Russian Federation: the world market is now also «empty».

So, at the moment, alas, nothing prevents the rise in prices.