Russia will not lift grain export ban by year's end: Putin

2nd September 2010, Comments 0 comments

Russian Prime Minister Vladimir Putin said Thursday that Russia would not lift its temporary ban on grain exports until after next year's harvest, extending the embargo until at least mid-2011.

"I believe it's necessary to note that we will only be able to consider lifting the grain export ban after the next year's harvest has been reaped," Putin told a government meeting in televised remarks.

Putin did not give a timeframe. His spokesman Dmitry Peskov, reached by AFP, also declined to be specific, only confirming that the ban would not be lifted on December 31.

A record drought has destroyed a quarter of Russia's harvest this summer and Putin signed a decree in early August introducing a ban on grain exports from August 15 to December 31.

Putin subsequently said the government might extend the embargo into next year.

The export ban is aimed at keeping the Russian domestic market well supplied with grain to prevent sharp rises in prices. Russia's leaders, acutely nervous of social unrest, will be keen to avoid any discontent over food prices.

The export ban from such a key global player stung world wheat markets, sending prices to two-year highs and sparking worries of a crisis in global food supplies.

At the government meeting, Putin said the announcement was made "in order not to generate unnecessary nervousness (and) to secure stability and predictability" for all the market participants.

Agriculture experts said Putin's announcement did not catch anyone by surprise.

"What happened is what everyone expected," Andrei Sizov, managing director of SovEcon, a Moscow-based agriculture consultancy, told AFP.

Sizov said the move meant the grain export ban would not be lifted before July 2011 when farmers will begin reaping crops in the country's south and the government will have an idea of its next harvest figures.

Russia, the world's number three wheat exporter last year, exported 21.4 million tonnes of grain and had even embarked on a major new campaign to boost its international market share, an ambition that now must be set aside for some time.

© 2010 AFP

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