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National cereal stocks cover the demand of Estonia for food cereals for nearly two months

Submitted by ospa on Fri, 12/16/2022 - 11:04

As of 1 January 2023, the Estonian Stockpiling Agency will form cereal stocks as part of the national food reserves which will cover the demand for food cereals for the domestic consumption of Estonia for nearly two months.

According to Priit Ploompuu, board member of the ESPA, the formation of the national cereal stockpile was accelerated by the escalation of Russian aggression in Ukraine in February this year.

‘As the military action caused the global market price of cereals to skyrocket and the threat of a worldwide food crisis increased, the government decided to secure the supply of cereals to the Estonian food industry for crisis situations. In this year’s supplementary budget, €450,000 was earmarked for the ESPA to build up the national cereal stocks. The Estonian Stockpiling Agency has carried out a public procurement as a result of which enough food cereals to cover the demand of over almost two months will be reserved for the country from the start of the new year.

The self-sufficiency of Estonia in cereals is good – on average, our farmers grow twice as much cereals as the industry and people consume, and much of it is exported. The global cereal prices remain relatively high, which is why the interest to sell persists. By national contracts, we ensure that the bins will not be left completely empty before the next harvest,’ said Ploompuu to explain the need to create cereal stocks.

The stocks of food wheat are formed as a delegated stockpile, in the case of which the ESPA reimburses the storage partners for the costs of holding the cereal stocks, but does not buy out the cereal. The stockholders may not take the strategic stocks reserved for the ESPA into use independently and may only use the stocks with the permission of the Estonian Stockpiling Agency, subject to a government decision. In a situation where Estonian food producers may face problems due to a shortage of raw materials, strategic state-controlled stocks will ensure the continuity of production.

The storage of the cereal stocks will initially be a one-off project for the ESPA until the autumn of 2023, when the new crop will arrive in the bins. In the longer perspective, it will be necessary to decide on the most optimal solution for the food security of Estonia, what types of food stocks it is reasonable for the country to have, and how to increase the resilience of the food industry and the agricultural sector to crisis situations.

In addition to the cereal stocks to be built up, the ESPA has also set up delegated stocks of ready-made food, such as preserved canned food and dry goods, which can be rapidly mobilised to feed the population in the event of large-scale crises.

Pursuant to the Public Information Act, the exact nomenclature, quantities, locations, and criteria for use of the national operating stockpile are not public information.

The Estonian Stockpiling Agency, which is a state enterprise, started operating in the summer of 2021 and is responsible for stockpiling, storing, and organising the utilisation of essential goods needed by the Estonian population in emergencies.