08/06/2010, 00.00
RUSSIA
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Russia bans wheat exports

20% of cereal crops destroyed by drought and fires. Prime Minister Putin speaks precautionary measure and reassures that there are sufficient stocks for domestic consumption. But grain prices in Russia have increased more than the world markets. The new sharp price increase will cause problems for big importers.

Moscow (AsiaNews / Agencies) - Russia has banned the export of wheat, flour, maize and other cereals from 15 August to 31 December, after the severe drought and devastating fires in recent weeks that have destroyed 20% of grain crops . further large increases in world prices of wheat are expected, which has already risen by 70% this summer.

Prime Minister Vladimir Putin yesterday announced a ban on exports - during a televised Cabinet meeting - as a precautionary measure, saying the country still has sufficient reserves, but it is necessary to "prevent increases in domestic price of food, preserve the number of cattle and provide reserves for next year. " After the next harvest it will decided whether to extend the ban in 2011.

Just two days ago the Minister for Agriculture Alexander Belyayev had ruled out such a prohibition, ensuring that reserves cover domestic demand and were well enough to continue their exports. Moreover the farmers have little interest in the foreign market, given that grain prices have increased more rapidly in Russia and around the world.

The ban will cause an increase in world price of bread, primarily benefiting countries like U.S., Australia and Argentina, major exporters of cereals, while Canada and the European Union does not forecast large harvests. Conversely, it could starve entire regions of the Middle East, Africa and Central Asia, where the price of food is a large part of household income.

The damage to crops was mainly caused by severe drought and warmest summer in the last 130 years. But the death blow was dealt by extensive fires that have burned over 650 thousand hectares of land in a week, with 40 deaths and 1,800 houses burned.

Moreover, Russian agriculture has lagged behind in development, with little investment since the collapse of the Soviet Union. Only in recent years has production improved, thanks to the intervention of Russian and foreign companies that buy large tracts of land under cultivation.

In 2009 Russia exported 21.4 million tons of grain.

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