Russia bans grain exports amid drought

Russia says it will ban grain exports for the rest of the year after a severe drought destroyed 20 percent of its wheat crop.

Russia bans grain exports amid drought

Russia says it will ban grain exports for the rest of the year after a severe drought destroyed 20 percent of its wheat crop.

Russia is among the world's largest exporters, and fears that it would cut exports had already helped drive up wheat prices by nearly 70 percent since early June.

The ban goes into effect Aug. 15 and runs through Dec. 31.

Prime Minister Vladimir Putin announced the ban at a Cabinet meeting on Thursday, saying it was needed to prevent a rise in domestic food prices, preserve the number of Russia's cattle and build up reserves.

"I think it is advisable to introduce a temporary ban on the export from Russia of grain and other agriculture products made from grain," Putin told a government meeting.

"This ban will be temporary in character. We will talk later about how we will behave after December," Putin said, indicating that the ban will be in force at least until December.

September wheat on the Chicago Board of Trade rose to be limit-up 60 cents to $7.85-3/4 a bushel, a contract high and a 23-month peak for front-month prices.

Putin also pledged 10 billion roubles ($335 million) in subsidies and another 25 billion roubles in loans to the farm sector, and said that grain from the government intervention fund would be distributed to regions without auctions.

"We have enough reserves -- 9.5 million tonnes -- but we must not allow a rise of food prices in Russia, retain the livestock count and form reserves for next year," Putin said.

"Of course the government is interested in selling this resource via auction, but our aim is not to make more money but help those agricultural producers who need this help."

The government had earlier planned to start intervention tenders to sell some 3 million tonnes of grains from its stocks to flour millers, animal breeders and feed makers on a tender basis.

Earlier on Thursday, Interfax reported that the government planned to ban the export of wheat, barley, rye, corn and flour.


Agencies

Güncelleme Tarihi: 05 Ağustos 2010, 15:59

SeydiAli

YORUM EKLE