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European wheat prices fell on Monday after Russia, traditionally one of the world’s top exporters of the commodity, announced plans to end a grain embargo on July 1.
“From July first this year we will lift the ban on grain exports,” Vladimir Putin, the Russian prime minister, said on Saturday. Grain stocks in Russia’s rich southern farming belt could be exported even before the new harvest is gathered, he added.
After an 11-month absence, Russia’s return to world grain markets will help offset an anticipated decline in supplies from Europe and the US where drought threatens to reduce harvests this year. However, traders remain braced for imminent grain shortages as global consumption rises to unprecedented levels. The International Grain Council, a London-based intergovernmental group, trimmed its forecast for the 2011-12 wheat crop to 667m tonnes last week citing “unfavourable weather”. Meanwhile world consumption is expected to reach a record 669m tonnes in 2011-12, the ICG said.
Russia banned exports of wheat, barley and rye last August to guard against food inflation after an extreme heatwave and drought wrecked more than one-third of its grain crop. The embargo, together with grain export quotas imposed by Ukraine, drove world wheat prices to their highest level since 2007-08, highlighting the precarious balance of world food supplies and pushing up food inflation worldwide.
“From July first this year we will lift the ban on grain exports,” Vladimir Putin, the Russian prime minister, said on Saturday. Grain stocks in Russia’s rich southern farming belt could be exported even before the new harvest is gathered, he added.
After an 11-month absence, Russia’s return to world grain markets will help offset an anticipated decline in supplies from Europe and the US where drought threatens to reduce harvests this year. However, traders remain braced for imminent grain shortages as global consumption rises to unprecedented levels. The International Grain Council, a London-based intergovernmental group, trimmed its forecast for the 2011-12 wheat crop to 667m tonnes last week citing “unfavourable weather”. Meanwhile world consumption is expected to reach a record 669m tonnes in 2011-12, the ICG said.
Russia banned exports of wheat, barley and rye last August to guard against food inflation after an extreme heatwave and drought wrecked more than one-third of its grain crop. The embargo, together with grain export quotas imposed by Ukraine, drove world wheat prices to their highest level since 2007-08, highlighting the precarious balance of world food supplies and pushing up food inflation worldwide.
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