Russia to impose temporary ban on grain exports

Cereals burning near the town of Voronezh

Russia is to ban the export of grain from 15 August to 31 December after drought and fires devastated crops.

"I think it is advisable to introduce a temporary ban on the export from Russia of grain and other agriculture products made from grain," Russian Prime Minister Vladimir Putin said.

Russia, one of the biggest producers of wheat, barley and rye, exported a quarter of its 2009 grain output.

Mr Putin's announcement sent wheat prices to a 23-month high.

They had already hit 22-month highs earlier this week due to concerns about the impact of the drought and fires on Russian wheat exports.

However, many commodities analysts insist there is currently a surplus of wheat in global markets following record harvests in 2008 and 2009.

They say that speculators have been driving wheat prices artificially high because they are hoping to make a profit from the worries over Russian exports.

Analysts add that while there is likely to be a knock-on increase in bread prices in the short term - about five pence on the price of an average loaf in the UK - wheat prices should soon fall back down again.

They say this is because the US - the world's number one exporter - is predicting a bumper harvest of its current crop.

Extra help

Wheat Futures US cents/bushel

Last Updated at 26 Dec 2014, 14:30 ET Wheat Futures one month chart
price change %
610.75 -

Russia is banning the export of grains including wheat, barley, rye and maize.

It will also ask its regional customs union partners - Kazakhstan, another leading grain exporter, and Belarus - to follow the suit.

Mr Putin said that grain from the state reserves would not be auctioned but would be distributed to regions with the greatest need.

"The aim in this case is not to make more money, but to aid those farmers that need help today," the prime minister said at a government meeting.

He added that the government would provide 10bn roubles ($335m, £211m) in subsidies and another 25bn roubles in loans to agricultural companies affected by the drought.

Meanwhile, the wildfires in Russia are showing little sign of abating.

Officials said on Thursday that fire crews were still fighting to extinguish nearly 600 fires in an emergency that has now claimed 50 lives.

Middle East markets

Russia produces a soft type of wheat that is unsuitable for making the traditional loaf of bread seen in the UK.

As a result Britain buys only a nominal amount of Russian wheat.

Russia instead sends most of its wheat exports to the Middle East, where they are used to make unleavened flatbreads.

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

More on This Story

Russia Business Report

The BBC is not responsible for the content of external Internet sites

More Business stories


Features & Analysis

  • Abdi Nor IftinGolden ticket

    How a refugee entered a lottery and won a new life in the US

  • Herring in a fur coatMerry herring

    How fish 'in a fur coat' is enough to make Russia's New Year happy

  • Curiosity Self Portrait at Windjana Drilling SiteIn pictures

    The most stunning space photos of the year

  • Amy Adams, Cate Blanchett, Sandra Bullock and Dame Judi DenchFilm quiz of 2014

    How much do you remember about the past 12 months?

Elsewhere on the BBC

  • BooksHidden messages

    Adults often find surprising subtexts in children’s literature – but are they really there?


  • Click presenter Spencer Kelly flies a droneClick Watch

    From wearable technology to drones and robots - highlights from 2014

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.