The authorities of Russia have spoken about a possible ban on grain exports if their reserves in the country decrease to a critical level of 10 million tons, which will allow domestic needs to be met within 1.5 months. But experts believe that reducing stocks to such a low level is unlikely, so they are surprised by the Russian government’s intentions to introduce a ban on grain exports, Graintrade reports according to Forbes.
Director General of the Institute of Agricultural Market Conditions (IKAR) D. Rylko said that the country currently has a grain export quota, and even when exporters exhaust it, the remaining grain will be much larger than 10 million tons. In addition, exporters are currently trying to sell as much grain as possible to support domestic prices in the country.
General Director of the ProZerno Analytical Center V. Petrychenko believes that bad weather and restrictions on the execution of contracts already hold back exports, so there is no need to introduce an additional ban.
As of September 1, grain stocks at agricultural enterprises amounted to 39.924 million tons. The grain harvest in net weight was forecast at the level of 140 million tons, of which the share of wheat is 93 million tons, which is somewhat inferior to last year’s record indicators. Therefore, the Ministry of Agriculture estimates the export of grain from the Russian Federation in the current season at 65 million tons.
To increase world food prices
Market participants had previously expected that the authorities of the Russian Federation could ban the export of grain from the country in order to increase world food prices, since the export of wheat from the Russian Federation in the current season is 25%, so any restrictions will lead to a sharp jump in quotations, as happened on the beginning of a full-scale invasion of Ukraine. From each ton of wheat, the Russian Federation receives up to 30% of the price in the form of an export duty, so the country’s authorities are interested in the growth of world quotations.
In the budget of the Russian Federation for 2024, expenditures on the military have been increased to 30%, so any additional income will be directed to the manufacture of weapons and the continuation of aggression against Ukraine.