A drought has sparked fears of Russia curbing grain exports

A drought has sparked fears of Russia curbing grain exports

Russian grain exports since the start of the growing season have dropped 17% compared to last year, according to a local analyst.

The major grain-growing nation exported 6.09m tonnes between 1 July and Tuesday (18 September), SovEcon said, citing the Russian Ministry of Agriculture. The average contract export price for wheat in Russia for September was US$296 per tonne, SovEcon said.

SovEcon said wheat prices in the European part of Russia increased by 2.5% over the course of last week driven by strong demand from export-oriented companies and domestic consumers. The price increased by 4.2% in the Asian part because of insufficient supply on the back of strong demand from consumers.

“On the world grain market there is an upward trend in prices, which decreased the forecast of wheat production in Russia, Kazakhstan and Australia, as well as an increase in purchases of grain in Egypt,” SovEcon quoted the ministry as saying.

Russia is coping with a drought that has cut grain yields by more than a quarter. The country may decrease exports, although the government has dismissed such concerns.

A Russian ban on grain exports in 2010 saw shares in major brewers drop. Investors feared the move would significantly increase costs.