March 7, 2008

Russian grain prices surge sharply in February despite export restrictions

Grain prices in Russia rose last month in spite prohibitive export tariffs, which halted trade in wheat and barley.

Preliminary forecasts of the 2008 Russian crop indicate both sown area and use of inputs to rise, boosting grain output above the 2007 level.

Minister of agriculture, Aleksey Gordeyev, announced that the country's grain exports would reach 15 million tonnes from July 2007 to July 2008, although an extension of the prohibitive export tariff on wheat and barley should preclude reaching that level.

Russia's grain stocks on large grain farms fell more rapidly in January than a year earlier. However, due to the larger 2007 harvest, stock remained near the previous year's levels.

The Russian Grain Union predicts grain plantings to be 55 percent wheat, 2.8 percent corn and 21.8 percent barley.