Russia ban on grain export begins

Russia has imposed a ban on grain
exports until the end of the year, after a severe drought and a spate of
wildfires devastated crops.

Russia is one of the world’s biggest
producers of wheat, barley and rye, and the ban is likely to see bread prices
rise in places like the Middle East.

The measures are designed to keep
domestic food prices under control.

But agriculture ministry data has
revealed that this year’s crop is unlikely to meet even domestic demand.

Hundreds of wildfires have been burning
across central Russia in the last three weeks. But officials say the area being
affected by the fires is now almost a quarter less than a week ago, reports
say.

The grain harvest is down by at least a
third compared with last year.

The BBC’s Richard Galpin in Moscow says
it comes as no surprise that Russia is temporarily banning exports as it seeks
to stop prices sky-rocketing at home.

Correspondents say the temporary ban is
being motivated by more than just economics – Russians eat bread with
practically everything and rising bread prices is an issue which has
traditionally had the power to stoke popular unrest.

The country’s leadership has so far been
unable to say when the ban might end.

President Dmitry Medvedev predicted that
the measures could be lifted before the end of the year.

But Prime Minister Vladimir Putin
suggested the ban could remain in place until well into 2011.

Mr Putin said that this year’s crop
could be as low as 60 million tonnes, well below last year’s 97 million, and
Russia needs almost 80 million tonnes to cover domestic consumption, so even
with this ban, there might be a shortfall of nearly 20 million tonnes for the
Russian consumer.

The Kremlin says talks on the issue will
be held in October.

Last year, Russia exported a quarter of
its 2009 grain output.

Russia produces a soft type of wheat
that is suited to making unleavened bread, so much of its wheat is exported to
the Middle East.

Egypt is its largest market, followed by
Turkey, Syria, Iran and Libya.

Analysts say there is likely to be a
small increase in bread prices in the short term.

But they say wheat prices should soon
fall back down again because the US – the world’s biggest exporter – is
predicting a bumper harvest of its current crop.

This week economists predicted that the
heatwave and wildfires would cut $15bn (£9bn) from Russian economic output.

The figure, which does not include the
cost of rebuilding hundreds of destroyed homes, is predicted to slow down the
country’s recovery from the recent global crisis.

More than 50 people have died in the
fires and many more are thought to have been adversely affected by smog which
has enveloped Moscow and other areas.

Moscow’s daily death rate is twice what
it would be normally for the current time of year. While officials have been careful
not to link this to the heat and smog, doctors have been doing so off the
record.

On Saturday, heavy rain cooled the
capital, providing respite from the record-breaking temperatures and the smog
for the first time in weeks.

However, dozens of wildfires are still
burning around Moscow, and according to the Emergency Situations Ministry more
than 500 wildfires are continuing to burn across the country.

These include a new blaze to the east of
the major nuclear research facility in Sarov, about 400km (250 miles) east of
Moscow.

Earlier this month, as fires raged near
the site, all nuclear and explosive materials were removed as a precaution.

When those fires were brought under
control, the materials were returned to Sarov.

However, Sergei Novikov, a spokesman for
the Rosatom state atomic corporation, told the Associated Press that there was
no immediate need to move them out again.

0
0

NO COMMENTS