Russia & USA: The USA to replace Russia on grain market during export ban

The United States, the world's largest grain exporter, will act as a substitute for Russia on the world grain market when an export embargo comes into force on August 15, Russian Agriculture Minister Yelena Skrynnik told Ekho Moskvy radio station, according to RIA Novosti.

Russia banned the export of grain, including wheat, barley, rye and maize, from August 15 to December 31, following a drought and wildfires that have destroyed 10.8 million hectares of crops. Forecasts for this year's harvest have fallen as low as 60 million tons, 38% less than last year.

Kazakhstan and Ukraine, two other leading grain exporters, have also been affected by drought, Skrynnik said.

It is unlikely that "these countries will take our place on the world grain market," she said. "If any country is going to take our export potential, it will be the United States."

Russia is the world's fourth largest wheat exporter. Its biggest customers are Egypt, Turkey, Syria, Pakistan and Iran. Last year, Russia exported a quarter of its grain output.

Russia may revise the embargo in October when the losses incurred by the drought become clearer, Skrynnik said.

She said the ministry does not expect a rise in bread prices - something that most analysts say is nonetheless inevitable after the worst drought and wildfires in decades.

Analysts said on Tuesday the short term losses for the Russian economy from the record-breaking heat wave and accompanying drought and wildfires may amount to 1% of 2010 GDP, or around $15 billion.

11 August, 2010