Russia stops foodgrain exports

August 15th, 2010 - 8:33 am ICT by IANS  

Moscoow, Aug 15 (IANS/RIA Novosti) Russia has stopped the exports of foodgrains till the end of this year to cope up with the loss of agricultural harvest due to scorching heat wave and draught.
The ban on export which came into force Sunday will remain until the end of this year. However, the government may revise the ban after October 1, when the size of the harvest volumes becomes clearer.

According to preliminary estimates, the drought ruined crops on about 11 million hectares. A total of 60-65 million tonnes of grain are expected to be harvested in Russia this year, compared to 97.1 million tonnes in 2009.

A scorching heat wave has gripped much of European Russia since mid-June, coupled with the worst drought since the 1970s.

This agricultural year, Russia can afford to export no more than 4.5 million tons of grain, the Agriculture Ministry said Thursday.

Analysts said the short term losses for the Russian economy from the record-breaking heat wave and accompanying drought and wildfires may amount to 1 percent of 2010 GDP, or around $15 billion.

President Dmitry Medvedev said the Russian government must protect local grain producers and exporters, who may face legal action over broken contracts due to the grain export ban.

“We have put our producers and those engaged in exports into a difficult situation and we did this deliberately,” Medvedev said. “But if we did it, we must stand behind them to protect them, create the necessary legal evidence to show that it was a force majeure… and that they were unable to supply their customers.”

Russia was ranked the world’s fourth largest grain exporter in the past several years, after the US, the EU and Canada.

Last year, Russia exported 21.4 million metric tons of grain, with Egypt, Turkey, Pakistan, Azerbaijan, Syria, Jordan, Iran, Libya, Bangladesh and Yemen being the largest consumers.

–IANS/RIA Novosti

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