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The following article was published in our article directory on August 14, 2010.
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Russian Grain Export Will Lead to Global Food Price Rise

Article Category: Advice

Author Name: xia zihui

Two days, Moscow has finally "open the fog lifted smoke," and see the long absence, the sun - well-being with; but will be re-heard in Moscow this weekend, "smoky" - worried about the ... ...

This two-day Moscow, a number of kiosks and food stores has quietly emerged in the manufacture of large-scale bread price increase announcement, and some bread and bread products vendor booth prices starting from 3 August has risen by 12%. According to food store staff said that starting from August 2, bread and bread products, the trend of rising wholesale prices on more and more obvious, higher retail prices are forced to follow. Obviously, this round of bread prices is a direct result of Russia's agriculture this year, drought and forest fires failure is a foregone conclusion. Russian Agriculture Minister Skrynnik said before, if September 5 still no significant rainfall, then the planting of winter crops this year will be affected, the original 18 million hectares of winter, only the actual acreage planted 15 million hectares.

August 9, Russian Prime Minister Vladimir Putin said at the government meeting, subject to continuous high temperatures and drought, grain this year, Russia 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, demand for 78 million tons of grain. However, he said, even by the most pessimistic forecast, the production of only 60 million tons of grain this year, the Government remains fully capable of meeting domestic demand, because the intervention fund in 950 million tons of food stocks carried over from previous year there are 21 million tons of grain.

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, while Zubkov, First Deputy Prime Minister instructed monitor this process in order to stabilize domestic grain prices and keep the amount of livestock.

To protect the domestic market, say goodbye to the international market

August 5, Putin said the government work conference of the Bureau, the Government decided to temporarily ban exports of food and food products. According to the Government, signed the same day that Putin and 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, including export.

On August 3, Russian Deputy Minister of Agriculture in Novosibirsk Zhaokai Beliaev's "Siberia food" still insisted the International Conference: "Russia do not intend to grain export restrictions.Jueding rest with the Government, Mu Qian As the situation is not to restrict grain exports. "He said that the Russian grain export market lost easily, but regained it is difficult. Therefore, the Government will strive to balance exports and domestic demand, as far as possible to keep export markets. He was also confident that the Ministry of Agriculture plans to grain exports in 2010 to maintain the "level of previous years."

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 that year was 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 grain exports in 2010 total to 22 to 22.5 million tons to china, Japan, Korea and other Far East countries in the region of grain export work has already been started.

However, the unexpected outbreak, while Russia's ambitious to the international grain market, he has suffered a once dry weather. Since June of this year, Russia continued high temperatures and drought in some areas. As of August 5, Russia has suffered drought in 28 districts, 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 national grain output this year forecast for a drop lower and lower: from the beginning of the 90 million tons down to 85 million tons, then fell to 70 million to 75 million tons, down 60 million now to 65 million tons.

Although the Russian government and the Russian Grain Union leaders have come forward recently to stabilize the market, said grain reserves, grain and bread shortages would not occur. However, most Russian food and feed prices have begun to rise recently. According to Russia's European part of the Food Association data, 2 to 9 July, the Russian average price per ton of wheat rose 8% to 9%, to 3910 | 4145 rubles per ton (about 128 | 136 U.S. dollars / ton). Fluctuations in the domestic market price for Russian executives decided to first consider the stability of the domestic grain market, a major issue directly related to livelihood.

Russia always wanted to be "food exporting country"

Russian 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 "one of the world's largest grain exporter" status.

Russian Agriculture Minister Skrynnik mid-July this year, the Bureau meeting in the government, said in 2013 that if Russia's domestic grain production to 106 million tons, then Russia's food exports would reach 50 billion U.S. dollars. She said that at present, Russian grain exports of 15 countries have been, and future goals is to expand to 20 countries, most of which is the export prospects in Southeast Asia, the Middle East and Latin American markets. Skrynnik that stability will harvest the potential of Russia's grain exports increased to 3.5 billion per year.

Russian Prime Minister Vladimir Putin commented that Russia has entered the ranks of the world's major grain-producing countries, Russia must maintain a place in the world grain market. To achieve this strategic goal, Putin early in February this year the Government signed on special order, asked the Government funding to boost food production 5.0 billion rubles. According to government spokesman Peskov said that in order to further support domestic agricultural development, Prime Minister Vladimir Putin signed a grant from the Agricultural Intervention Fund for 5.036 billion rubles in order to stimulate food production.

This year on April 19, President Dmitry Medvedev met with the government in charge of agricultural production during the First Deputy Prime Minister Viktor Zubkov, obliges the government to continue to take measures to ensure the development of agricultural production. Mei pointed out that most countries have adopted the world's way of government subsidies, such as reducing agricultural lending rates on fuel and oil price controls and other agricultural support their agricultural production. Zubkov said the lending rate for agriculture this year, 12%, lower than in 2009. In addition, the Russian government and farm machinery in the fuel oil prices also give its farmers a 10% discount. To ensure the smooth progress of spring this year, the Russian government will provide farmers with compensation for 500 million rubles and 47 billion rubles grants spread fertilizer. This series of actions is to make Russia the world food market share continues to grow.

Export ban is a "double-edged sword"

Skrynnik July 21 drought-affected farmers in assisting the organization of the meeting said that to help drought-affected areas, the Russian Ministry of Agriculture will start Aug. 4 with a grain reserve of grain market intervention in disaster areas. She said these grain will be sold to those engaged in animal husbandry, poultry industry and food processing industry enterprises. According to the Ministry of Agriculture of the idea, since July 26, 2010, the "unified food company" will be commissioned a company to participate in national commodity exchanges in the food trade. It is reported that the food delivery traded more than 300 million tons, mainly stored in the drought area and its adjacent areas in 2005 and 2008, storage of feed grain and produce an annual output of food grains in 2005. However, on August 5, Putin suddenly changed his tune said the government had intended to sell by auction this food, but considering the current complicated situation,according to the Shen Qing Ge Di Qu rather than those approved by the auction Lai distribution of food.

Russian grain export ban for new initiatives, the industry claims that Russia, which would damage the reputation of Russia's exports, so that food importing countries do not trust. North Africa and the Middle East is a traditional Russian wheat buyers, now they are actively seeking sources from other regions. However, some experts said that Russia's position will not be easily replaced, because this year the EC and Canada, and Kazakhstan are tolls cut global wheat supplies may 18 million to 20 million tons, Russia, the traditional importing countries Xiao Mai Bu Rong Yi to find other alternatives.

Russian economic analysts Andressey Karamazov that the Government's comprehensive initiative, the Russian domestic food prices or to stop, and do not rule out the downside. The effect of the ban, E Aer France Bank chief economist Er Luowa that the ban will lead to global food prices, will be stimulated milk and meat prices, which will turn the Russian domestic market affected. Russian agricultural experts Ricoeur argued that even if the ban on Russian domestic prices in the short period of time down, but after a few months the price may still be up again, so that failure of government efforts to stabilize prices. Experts have pointed out, on food producers, the ban may not be a good thing, millions of farmers are likely to suffer, because food exporters will stop buying food from peasants, and many farmers who had grain are watching, waiting for prices to continue rising. Ban one, prices may fall, they will lose high shots.

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