Russia halts grain exports to ex-Soviet republics

By: 3 years ago

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MOSCOW — Russia, a major supplier of grain, has put a stop on exports to four former Soviet countries to secure domestic supplies and avoid a spike in prices.

The temporary ban announced by the government late Monday affects countries of the Eurasian Economic Union, a Moscow-led trade club that includes Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia.

The Russian government also said it would stop exports of both “white and raw cane sugar to third countries”.

The restrictions on grain exports expire on June 30 and those on sugar on August 31, the government said, adding that the decision was taken “to protect the domestic food market given the situation of external restrictions”.

Western nations have imposed a spate of sanctions on Russia over the Ukraine conflict that make it difficult to import goods into the country.

The penalties have badly dented the already struggling economy and caused the ruble to sink to historic lows.

The Russian restrictions on grain exports include wheat, rye, barley and corn, as well as silage.

Moscow’s decision makes certain exceptions, including for the pro-Russian breakaway regions of Donetsk and Lugansk in eastern Ukraine.

Ukraine harvest

The International Monetary Fund warned on Monday that the conflict could imperil global food security.

UN Secretary-General Antonio Guterres also warned Monday that the world must act to prevent a “hurricane of hunger and a meltdown of the global food system”.

Both Russia and Ukraine are major wheat exporters and the conflict has already sent waves through global commodities markets and seen prices for grain climb precipitously.

APK-Inform, an agribusiness data and consulting firm specialising in former Soviet countries, said Monday that 28 percent of Ukraine’s winter wheat, rye and barley crops may not be accessible for harvest.

It added that according to its preliminary estimates, the area planted with spring grains may be down by 39 percent.

Sugar shortages?

For several days, some Russian supermarkets have imposed limits on how much people can buy of several products, including sugar.

Images of empty shelves have circulated on social networks but visits by AFP journalists to a selection of food shops did not find any shortages.

According to Russia’s national statistics agency, Rosstat, the price of sugar jumped by 13 percent over the week of March 5-11.

On Sunday, Russian officials declared there was no shortage of sugar in the country, and on Monday the prosecutor general’s office ordered checks at sugar producers to ensure stocks were not being held back to create shortages and a rise in prices.

According to some local media, in countries such as Kazakhstan and Kyrgyzstan, sugar has largely disappeared from the shelves and its price has doubled.

Mikhail Burmistrov, head of Infoline-Analytics consulting firm, said that price caps introduced by the authorities have given firms the incentive to hold onto their stocks until consumer prices rise or to sell it to industrial customers for whom prices are higher.