March 28, 2011

Russia will not remove grain export ban earlier than September

Russia will not remove its grain export ban before September or October 2011 as the government wants to establish first the security of domestic stocks, Agriculture Minister Yelena Skrynnik reiterated on Friday (Mar 25).

"Now our mail goal is to efficiently and timely sow 50 million hectares to spring crops, including grain on at least 30 million hectares, which will translate into an 85 million tonne harvest," said Skrynnik.

"At the end of September or October we will count the volume of our harvest and only after that we can decide whether to lift the grain export embargo or to extend it. Export resumption is one of our priority goals."

The worst drought and heat in the history of meteorological observations hit Russia last year, pushing grain production down 36% to 60.9 million tonnes and forcing the government to prohibit wheat, barley, rye, corn and flour exports for the first time in the post-Soviet period.

In 2009, Russia harvested 97 million tonnes.

Skrynnik has said Russia needed an 85 million tonne harvest to lift the embargo. First Deputy Prime Minister Viktor Zubkov has said he did not rule out an extension beyond the end of 2011.

Russian Grain Union President Arkady Zlochevsky said that he expected an 86 million tonne harvest, although spring crop sowing started two weeks later than last year due to longer than usual colds this year.

Among risk factors Zlochevsky mentioned that farmers had only received RUB24 billion (US$846.14 million) of loans from RUB147 billion (US$5.18 billion) needed to achieve the forecast. Outdated machinery, low quality of seeds and high prices for fertilisers also put the future harvest at risk.