January 25, 2011

Russian grain ban to be lifted after 2011 harvest

Russia's grain ban will be removed following the harvest of 2011, said the Director General of the Russian Center for Strategic Estimations and Forecasts, Doctor of Engineering Science Sergey Grinyayev.

"I think that embargo for the Russian grain will be lifted after the harvest of 2011. Anyway, there are currently all the prerequisites for this. Consequently, one may also forecast stabilisation of prices in the grain market, of CIS at least", he said.

According to the expert, the situation in this sphere when the grain market exit of the fourth country in the world on export of grains, represented by Russia, causes increase of prices for grains is quite natural. This is especially topical and explainable in case of Armenia, since Russia is situated quite close to Armenia geographically.

"Taking into account the fact that there is no stability in Ukraine, which also exports wheat, it is difficult to overstate the significance of the Russian grain for Armenia. As far as I know, before introduction of embargo the Armenian importers were buying wheat in Russia at US$170 per tonne, while they began to buy it after the August embargo at US$200-250. At the same time, taking into account the remoteness of Canada and Australia, the two biggest world grain exporters, import of wheat from these countries to Armenia seems unprofitable," Grinyayev said.

As spokesperson of the Russian Grain Union Anton Shaparin, said in 2009 Armenia imported 357,788 tonnes of wheat from Russia, that is more by 62.9% than in 2008. As compared with 2007, the growth made up 2.2% point.

Specific weight of Armenia's import in the total volume of the exported Russian wheat in 2009 made up 2.13%. According to the data of RGU, Armenia imported 26,900 tonnes of wheat from Russia in Q1 2010, and the specific weight made up 0.65%.

According to the Armenian grain market participants' estimates, the cost of wheat in the Georgian Black Sea ports increased almost twofold started June 2010-from US$190-$195 to US$380. Upon arriving in Armenia, its prime cost makes up about US$500 with account of transportation expenses, tax and customs fees.