Russia is going to remain world’s biggest grain exporter

A temporary ban on grain exports imposed by Russia after drought and fires that devastated crops, will be removed as soon as the country has enough grain for domestic use, Russia’s Agriculture Minister, Yelena Skrynnik, said following the talks in Geneva on Russia’s accession to the WTO.

Russia banned the export of grain from 15 August to 31 December after drought and fires devastated 30% of the expected crops. Russia has temporarily quitted the global grain market but is looking forward to regaining its position. This won`t be a very difficult task to do, says Arkady Zlochevsky, President of the Russian Grain Union: "Russia won`t be forgotten because it had conquered the world with its low prices. And we remain among the leaders. The fact that we quitted the global market is just a test for us, it will surely cost us a lot. When we return, we`ll have to sell our grain $5-10 cheaper than our competitors. Anyway, we`ll come over it". 

The UN Food and Agriculture Organization (FAO) blames the Russian ban for increased grain prices. But this does not seem to be fair because the tendency was already there before the ban was imposed. Still, there are some other reasons for growing prices, says Ivan Ushachev, deputy head of the Russian Academy of Agricultural Sciences:"Actually, Europe has harvested less crops than last year. That is why we cannot link the prices only to the Russian suspended grain exports. The more so because Russia will fulfill all exports obligations". 

It is absurd to say that the current situation on the world grain market marks a new phase of the global financial crisis. Arkady Zlochevsky continues: "I believe things will improve next year, and together we`ll manage to make up for all losses we are facing now. Some improvement can be seen on wheat market".

Russia aims to keep grain production at a stable and efficient level. Agricultural producers should continue to receive even greater state support in the aftermath of the unprecedentedly hot summer.

The talks on Russia’s accession to the WTO have resumed. Moscow promises to spend $9 billion per year on agriculture through 2012. After that within four years it will be reduced to more than $ 4 billion.