Russia extends ban on grain exports until 2011 harvest after severe drought, wildfires

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Russia extends ban on grain exports until 2011

MOSCOW — Russian Prime Minister Vladimir Putin said Thursday he has extended Russia’s ban on wheat exports until next year’s harvest to ensure it has bounced back from a severe drought and wildfires that destroyed 20 percent of the crop this year.

Putin said in televised remarks the ban will be lifted only after the 2011 harvest in the interest of “securing stability and predictability of business for all the market players.”

Last year, Russia was the world’s third largest exporter of wheat, but this year’s crop was badly damaged during the hottest summer in recorded history.

Regardless of the ban, Russian farmers have little incentive to export — grain prices have been rising even faster in Russia than on world markets.

The ban also covers wheat flour, barley, rye and corn.

Before the ban was announced in mid-August, the Russian Grain Union said it expected wheat exports to decline to 15 million tons this year, down from 21.4 million tons in 2009.

State farms have been marginalized since the fall of the Soviet Union and most of Russian grain production comes from big, often multinational companies.

After years of stagnation, Russian agriculture has been on the upswing as Russian firms and foreign investment funds have started to buy up land and upgrade production.