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Kazakh Zerno - News and analysis of cereals

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Russia Should Ban Exports of Grain as Drought Withers Crops PDF Print E-mail
Wednesday, 04 August 2010 11:43
Russia should temporarily ban grain exports, allowing companies to suspend supply contracts, because the worst drought in at least 50 years may mean a shortage of domestic supply, reported "Kazakh-Zerno" IA with reference to the "Bloomberg".
“The government should set a temporary ban on grain exports immediately,” Nikolai Demyanov, deputy chief executive officer of International Grain Co., said by e-mail yesterday. “It should set a ban rather than an export duty because a duty doesn’t qualify as force majeure for exporters,” he said, referring to a legal clause that allows a company to cancel contracts because of circumstances beyond its control. 
Russia should then tally crop losses before deciding whether exports can resume, Demyanov said. Such bans can be introduced by a presidential decree with immediate effect. 
The drought, which already fueled the biggest jump in wheat prices since 1973, shows no sign of easing and threatens sowing plans for winter grain, the national weather center said. Winter wheat normally accounts for about 65 percent of Russian’s annual crop. The dry weather forecast this month will extend damage to crops including sugar beet, potatoes and corn, the center said. 
The government doesn’t yet plan to restrict grain exports because of the drought, RIA Novosti reported today, citing Alexander Belyaev, a deputy agriculture minister. 
The Agriculture Ministry’s forecast of a grain crop of 75 million metric tons is “too optimistic,” Demyanov said. The crop may fall to 65 million tons, below domestic consumption of 75 million tons and leaving an exportable surplus of just 5 million tons including stockpiles, he said. Russia exported 21.5 million tons of grain in the 12 months that ended June 30. 
Grain stockpiles stood at 24 million tons as of July 1, including 9.5 million tons of government stocks, Agriculture Minister Yelena Skrynnik said July 22. 
“Planting winter grains in central Russia and along the Volga doesn’t make any sense today, because there is no moisture in the soil,” he said. “Southern Russia, the main exporter, is due to start winter grain planting in late August, and should there be little rain, conditions for winter sowing will be bad across Russia.”

 




 

 

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