Russia names conditions for ban on grain exports

Expert Korbut: “Pasta will not become cheaper if wheat exports are stopped”

Against the backdrop of almost record grain harvests, the government’s decision to ban their exports sounded like a bolt from the blue to many market participants. Last year, “unfriendly” countries tried to prohibit us from such international trade by any means. And this year, the Ministry of Agriculture itself decides to introduce a six-month embargo on grain supplies from December 1.

The government subcommittee on customs and tariff regulation considered the issue of introducing an automatic ban on the supply of wheat, corn, barley and rye abroad. This will happen if 10 million tons of grain remain in the country. This level is defined as critical for domestic consumption: it is only enough for the country to survive for a month and a half.

In fairness, it must be said that grain exports really need an eye and an eye. Otherwise, all our wheat and corn will end up on world exchanges. Let’s remember the recent events with gasoline and diesel fuel. They safely went abroad at world prices, significantly higher than domestic ones. And at the height of the harvesting campaign, domestic peasants were left without diesel fuel.

The situation may repeat itself with grain. Why not? On the domestic market, third-class wheat costs two times less than for export.

To avoid this nightmare, the Ministry of Agriculture has been instructed to monitor grain balances in the country on a monthly basis. If they fall to the critical level of 10 million tons, a temporary export ban may be introduced.

It would seem logical. But what is alarming about the authorities’ decision? According to official data, in 2023, Russian farmers harvested grain from 98% of the area, more than 151 million tons of grain were threshed, including almost 99 million tons of wheat in bunker weight. According to the Minister of Agriculture of the Russian Federation Dmitry Patrushev, in 2023 Russia will receive the second largest harvest in history, due to which it will be able not only to completely cover domestic needs, but also to send record volumes of grain to foreign partners. According to plans, this is more than 65 million tons. So why, against such a favorable background, is there talk about minimal grain reserves that may remain in domestic barns and landfills?

We asked independent agricultural expert Alexander Korbut about the features of grain arithmetic.

– For what reason is the export embargo introduced?

“The headlines in the media about the ban on grain exports are incorrect,” he believes. – This is about something completely different.

– But it’s written in black and white: from December 1 for six months!

– A ban is being introduced on the export of only durum wheat, from which pasta is made. This is a separate solution.

– If all this wheat remains in Russia, does that mean pasta should become cheaper?

– It’s unlikely, these are cheap, very insignificant volumes. But in general, no one is going to ban grain exports. A decision was made to monitor the availability of grain in storage facilities. And it was determined that the minimum volume that should remain there is 10 million tons.

This is a standard, it is in all the recommendations of the FAO – the UN food organization – however, for importing countries, not exporters. This is the volume that allows us to wait for the supply of food grains from the new harvest.

– We didn’t track such balances before?

– The availability of grain was controlled by Rosstat. Why this did not suit the authorities now, I cannot judge. The Ministry of Agriculture decided to conduct its own monitoring – it is always more convenient to count yourself. In addition, this will allow the department to justify investments in mechanisms for operational monitoring of the country’s food security. A safe level of 10 million tons will be fixed in all regulations, and when this volume is reached, an export ban may be introduced.

– But if we have 10 million tons of grain left, then there will be nothing left to export…

– In any case, we will not be able to reduce our reserves to this level. This is more of a virtual figure that is linked to grain quotas and other regulations.