February 20, 2008

Russian ban on grain export to CIS countries meant to prevent re-export

The ban imposed by the Russian government on grain exports to four CIS states- Belarus, Kazakhstan, Uzbekistan and Tajikistan, is designed to prevent the re-export of Russian grain to third countries, the Russian agriculture minister Alexey Gordeyev said Tuesday (February 20, 2008) as quoted by the agriculture ministry press service.

The decision was taken Feb. 15 and will come into effect one month later and last until Apr. 30. There is also an export duty on wheat in Russia now to all other countries of 40 percent but not less than EUR105 per tonne, as well as a 10 percent export duty on barley.

In theory, re-export of Russian grain via Belarus or Kazkahstan would have been profitable as it would cost duties of US$50-60 per tonne compared with US$105 per tonne for direct export from Russia.

However, Belarussian officials said the re-export of Russian grain via Belarus would not have been possible as any such operation would require special permission from the government, and no such permits would be issued.

In July-December 2007 Uzbekistan and Tajikistan imported only 3,000 tonnes of Russian grain each. Kazakhstan imported 370 tonnes. Belarus imported no more than 20,000 tonnes.