Russia’s grain exports ‘stop’ amid concerns
MOSCOW/ABU DHABI - Reuters
Russia’s main wheat buyers are Turkey and Egypt, very vulnerable to distruption. REUTERS PhotoRussia’s grain exports have stopped due to curbs brought in to protect domestic supply, putting big deals at risk, an influential farm lobby group said Dec. 24.
Russia’s main wheat buyers are Turkey, Iran and, very vulnerable to supply disruption, Egypt.
Moscow imposed informal grain export controls with tougher quality monitoring and limits on railroad loadings earlier this month, as it tackles a financial crisis linked to plunging oil and Western sanctions.
“Since Dec. 18 not a single vessel, which had been due to sail under contracts, has left,” Arkady Zlochevsky, the head of Russia’s Grain Union, the farmers lobby group, said.
“All loadings are suspended, there is only a need to legally formalize it,” Zlochevsky said. Global wheat futures rose after his comments. A spokeswoman for Russian Deputy Prime Minister Arkady Dvorkovich, who had promised to prepare the proposal for an export duty, was not available for comment.
Zlochevsky criticized the decision to impose restrictions for the third time in six years. Russia imposed a duty on wheat exports in 2008 and an official ban in 2010 when a drought hit its crop. The 2010 ban was partially responsible for triggering social unrest and a revolution in Egypt as more than 500,000 tons were not supplied and global prices rose damaging Egypt’s state bread subsidy program, Zlochevsky said.
About 3 million tons of grain due for export until the end of January were now stuck, Zlochevsky said.
As a result, Russia may fail to supply wheat to Egypt’s General Authority for Supply Commodities (GASC), the state buyer of the world’s largest wheat importer, in January, he added.