A ban on Russian grain exports, designed to restrain domestic food prices because of a severe drought, will not be lifted earlier than its December 31 expiry, First Deputy Prime Minister Viktor Zubkov said on Friday. This is the latest twist in the ban saga, which started after the Russian unit of commodities trader Glencore asked the government to impose a ban for 4-6 weeks from September.
But the government imposed it from August 15 to December 31. Then the Russian Grain Union, the industry lobby, asked the government last week to postpone setting the ban to September so that Russian traders could fulfil the existing contracts.
But President Dmitry Medvedev said on Thursday the ban could be lifted before its planned December 31 expiry, depending on the harvest, although Prime Minister Vladimir Putin has said it could last into 2011. "The decision to impose a temporary grain exports ban has been taken. It will be in effect from August 15 to December 31. There will be no changes," Zubkov told reporters.
Zubkov said that Russian businessmen should not count on changes but start moving grain to regions which because of the drought have a shortage of both milling and feed grain. He said the number of regions which had declared a state of emergency due to the drought had risen to 29 from 27 a week ago.
Zubkov asked the holders of grain stocks not to raise grain prices or else the government would start selling grain from its stocks. He did not say when the sales could start. The Russian state grain trader, the United Grain Co, said in a separate statement on Friday that Medvedev had ordered the government to channel the funds meant for export subsidies to UGC to pay for the government stock storage. It did not say how much money it would receive, but the Russian Grain Union said it sought 10 billion roubles for export subsidies.