February 1, 2011

Russia may not extend grain export ban on big yield

Russia is not likely to extend its grain export ban beyond July 1 if it sees its grain harvest over 80 million tonnes, Deputy Economy Minister Andrei Klepach said Monday (Jan 31).

"This (extending the ban) will depend on the crop. Our basic forecast is 85 million tonnes. Under such conditions we may export. Even if the crop is 80 million, we still may export," Klepach said.

Russia, which has suffered a severe draught unrivalled in over a century, expects its 2011 grain crop to recover to up to 87 million tonnes, Deputy Agriculture Minister Sergei Korolyov said last week.

The drought slashed Russia's grain crop to 60.9 million tonnes in 2010 from 97 million in 2009 and 108 million in 2008.

Faced with soaring prices, the world's former third largest wheat exporter banned grain exports from August 15, 2010 to July 1, 2011. Only flour exports were allowed from January 2011.

The Russian Grain Union, the industry's lobby, believes that Russia may export some 15 million tonnes of grain if it is able to harvest 80 million tonnes in 2011.

Klepach said the government plans to start sugar intervention sales from the state reserve to stabilise prices already in February. He did not provide details.