Russia's agriculture minister on Friday ruled out a ban on grain exports from the country, fears of which have helped to drive global prices higher following drought in U.S. and Black Sea grain belts.
The minister, Nikolai Fyodorov, said Russia might use sales
in some of its regions from state intervention stocks of grain –
“pinpoint interventions” – to contain domestic food price
increases due to expecatations of a weaker Russian harvest.
“All instruments are on the table, except for an embargo,
(which) could do more harm than good,” Fyodorov told Reuters
after Prime Minister Dmitry Medvedev held talks with farm
officials in the southern city of Rostov-on-Don.
“Pinpoint interventions are being considered where the
situation is unacceptable for Russia,” Fyodorov said.
U.S. wheat rose for a third straight session on
Friday, boosted by growing expectations of likely restrictions
to exports from the Black Sea region along with continued signs
of renewed demand following a recent setback in prices.
From April to June Russia sold about 2 million tonnes of
grain in state interventions. The country still has about 5
million tonnes in intervention stocks, which can be used to cool
prices in key regions for domestic supply, like Siberia and
Medvedev downgraded Russia’s harvest forecast in late July
to 75 million-80 million tonnes, of which wheat was expected to
account for 45 million tonnes, according to Agriculture Ministry
Fyodorov said on Friday he still saw Russia’s 2012 grain
harvest forecast at 75-80 million tonnes. “It depends on the
weather. It could change,” he said.
Any effort by Russia to restrict grain exports is likely to
provoke a similar move by neighbouring Ukraine, leaving markets
lacking supply from two major Black Sea producers at a time when
dry weather has slashed grain supply from India to Indiana.
With a harvest of 75 million-80 million tonnes, Russia could
afford to export 10 million-12 million tonnes of grain, the
government has said.
Some traders interpreted that declaration as an informal cap
on exports and have rushed to export while the gates are open.
Russia’s exportable grain surplus of 10 million-12 million
tonnes could run out by November, according to traders and
But Fyodorov said on Friday that this figure was a minimum
total, which might grow.
Russia could ultimately export as much as 16-17 million
tonnes in the current 2012/13 crop year, the head of Russia’s
Grain Union Arkady Zlochevsky said in early August.