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Russian Grain Export Ban Will Lead Global Food Prices Rising

Affected by continuous high temperatures and drought

, Russia's grain this year will cut one third of the year, the Government will not cancel a few days ago announced soon food exports ban. Putin said, according to USDA's latest forecast, this year's grain output may be 60 million to 65 million tons, while in Russia this year, grain demand is 78 million tons. However, he said, even by the most pessimistic prediction that this year, the grain has 60 million tons, government still has fully capable meeting domestic demand.

Putin said the main problem is difficult to predict how the 2011 harvest, it is not clear how much food balance in 2011. Thus, Putin asked the Ministry of Agriculture timely use of interventions in the grain market intervention fund in order to stabilize domestic grain prices and keep the amount of livestock.

Russia this year August 15 to December 31 will be banned including wheat, mixed wheat, barley, rye, corn, wheat flour, wheat and rye flour mixed agricultural products export.

It is reported that in 2009, Russian grain output exceeded 85 million tons of expected value, a total harvest of 93 million tons of grain, of which 58 million tons of wheat. Russia grain exports were 21.4 million tons, of which 18.3 million tons of wheat. According to the Russian government earlier this year, the increase in grain export program, Russia plans to in 2010 make grain exports total reach 22 to 22.5 million tons, of which export to China, Japan, Korea and other Far East countries have already started.

However, the unexpected outbreak, while Russia's ambitious to the international grain market, it has suffered drought weather. Since June of this year, Russia continued keep high temperatures and drought. As of August 5, Russia has 28 districts suffered drought, 20% of arable land affected. There are seven areas ravaged by forest fires declared a state of emergency, fire destroyed part of the farmland. Therefore, the Russian Ministry of Agriculture had to lower the expectation of national grain output this year: from the beginning of the year 90 million tons down to 85 million tons, then from 70 million to 75 million tons, and now drop to 60 million tons.

Russia is a major grain exporter. In 2009, its grain exports ranks third in the world, in the international grain market share of about 13%. At the same time, Russia is still doing everything possible to expand the country's grain exports, to further strengthen its world's largest grain exporter status.

Russian economic analysts Andressey Karamazov believe that as government's comprehensive initiative, the Russian domestic food prices will stop, and do not rule out the downside. The effect of the ban, chief economist believe that the ban will lead to global food prices, and also will be stimulated milk and meat prices, which will also affected the Russian domestic market .

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