BUSINESS

Russia to revoke grain export embargo on July 1

Russia will lift the ban on grain exports on July 1, Vladimir Putin, the Russian prime minister, said on Saturday. The restriction has driven up world wheat prices and discouraged investment in Russian agriculture, Realitatea.net informs. Hereby, grain stocks in southern Russia could be exported even before this year’s harvest is brought in, Putin added. The decision of Russia, following Ukraine’s move to lift grain export quotas this week, will ease concerns in the wheat market about supplies in the second half of the year as western Europe and the southern US, two important producing regions, suffer a drought that is likely to reduce output sharply. Russia banned grain exports last August after an extreme heat wave and drought destroyed one third of its grain crop raising fears of domestic food shortages. The embargo, together with grain export restrictions imposed by Ukraine, caused world wheat prices to surge to their highest level since 2007-08, highlighting the precarious balance of world grain supplies.

Soaring food prices in Egypt, formerly one of Russia’s biggest foreign grain markets, contributed to spark an uprising this year that forced Hosni Mubarak, the Egyptian leader, to stand down. Huge investments are required in Russian storage and transport infrastructure to facilitate the movement of grain between areas of over and under supply.

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