Process Management

News 691 views last update:6 Aug 2012

Russia may impose grain export ban

This year's grain harvest in Russia is expected to fall about 30% bringing it in line with the harvest crisis of 2010. Once again prompting the government to impose and export ban.

Russia’s Ministry of Agriculture recently reduced the grain yield forecast to 77-80 million tonnes, 16-19 million tonnes less than in 2011. However, if the current bad weather continue, many analysts believe that this forecast is optimistic.
Last week, analysts at the Bank of America estimated that Russia’s grain harvest will reach 65-66 million tonnes, which is below domestic demand of 72 million tonnes. If this happens, experts believe Russia will suffer an acute shortage of food and feed products. In order to cushion this blow the government must put a ban in place on trade contracts for the export of grain abroad. The price of food and feed in the domestic market this year may rise by 70% -90% -a number of analysts have predicted. As a result, many livestock farms may fall below the threshold of profitability.
The situation is also worsening in CIS
Last week it was also revealed that almost all of the CIS countries could face record-low grain harvests this year. The situation in Kazakhstan is particularly difficult: the weather conditions are the same as in 2010, and the harvest is expected to drop by 50% to 12.8 million tonnes compare to the level of 2011. The official forecast for Ukraine’s harvest has also been reduced to 45.3 million tonnes for this year –which is 20% below last year's harvest. However, local experts believe that the yield will drop even lower to 40 million tonnes

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