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Russia's Grain Export Ban Extended To 2011

08 September 2010
National Farmers Union

RUSSIA - Russian President Vladimir Putin has extended his country's export ban on grain until at least the end of 2011, prompting further increases in wheat prices and fresh concerns about the impact on food prices.

Mr Putin said he could only consider lifting the export ban after next year's crop has been harvested and there is more clarity on grain levels.

Wheat prices have now risen by 50 per cent since the beginning of July.

Senior economist for the National Farmers Union of England and Wales, Phil Bicknell, said: "Although wheat prices have risen sharply over recent weeks, it's critical to remember that it's just one cost involved in producing and distributing foods. Any changes in retail price of products like bread tend to be relatively weak in comparison to the farmgate wheat price. We can also expect a time lag effect before rising raw material prices trickle down to the retail level.

"The bigger concern has to be rising wheat costs for animal feed. It is questionable to what extent these rising production costs will impact on farmgate prices. If the supply chain doesn't recognise higher feed prices, in the short term at least, rising production costs are more likely to result in tighter margins for farmers than increased farmgate prices."

Russia introduced the export prohibition on grain and flour on 15 August, following a devastating drought that destroyed around a quarter of the harvest.

TheCattleSite News Desk


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