Moscow on Monday gave another mixed signal about the duration of a grain export ban set initially from August 15 to December 31, but European Union grain markets continued to rise, apparently ignoring the latest twist. President Dmitry Medvedev signalled Russia's ban on grain exports may be lifted earlier than December 31 this year and state grain stocks may be insufficient to cover the drought-hit country's needs.
His remarks contradicted a statement from Prime Minister Vladimir Putin, who last week said the ban may be extended to late 2011. Wheat futures in Paris and London extended gains to one-month highs, supported by bullish export prospects in the wake of weather-hit harvests in some major producing countries.
The closure of US markets for the Labour Day holiday kept volumes light, while this coming Friday's monthly crop report from the US Department of Agriculture was adding some uncertainty to the market outlook, traders said. A the worst drought in a century in Russia, last year's world No 3 exporter of grain, drove benchmark US wheat futures to two-year highs of $8.41 a bushel in early August and sparked fears of food price spikes.
"The grain embargo is a forced but temporary measure ... As soon as we understand how much grain we have harvested, the embargo will be lifted," Medvedev said. "All embargoes will be lifted, there should be no doubt about that," he told agricultural commodities producers in the city of Voronezh, capital of a region badly hit by the drought.
Russia has set an export ban on all grain and grain products from August 15 to December 31 to stabilise domestic prices after the drought was estimated to have cut the country's grain output to 60-65 million tonnes from 97 million tonnes in 2009. Moscow has sent mixed signals about the ban already. Medvedev said last month the ban could be lifted before its planned December 31 expiry, depending on the harvest but Putin said it could last into 2011. SovEcon agricultural analysts said earlier on Monday they expect the ban to be lifted in the middle of 2011.
RUSSIA MAY NEED GRAIN IMPORTS Medvedev also said that the government grain stocks were insufficient to cover all of the country's needs, in what could potentially be a signal of the need for imports. "The intervention stocks will not be enough to close all the issues... In any case we need to look for grain," he said.
"Bottlenecks (in the market) still need to be opened, and that is the responsibility of the government." The government intervention grain stocks are currently 9.5 million tonnes. It is part of the total intervention stocks estimated to be between 21 and 25 million tonnes. Analysts believe stocks may be lower. Officials and analysts have said Russia may have to import 3-6 million tonnes of grain as a consequence of the drought in the current 2010/11 crop year, which started on July 1.
Comments
Comments are closed.