Russia rejects wheat export ban

Russia on Friday denied plans to impose a ban on grain exports amid a drought that prompted the world's third-largest wheat exporter to lower its output forecasts for the second time in a week. The agriculture ministry said it now expected 70 million to 75 million tonnes of all types of grain to be harvested this year. Its last downgrade on August 23 put the target at 75 million to 80 million. Ministry chief Nikolai Fyodorov added that Russia's total grain exports should reach 10 million to 14 million tonnes -- in line with earlier reported government forecasts. RIA Novosti said wheat usually makes up about 80 percent of Russia's total grain export figure. The government released a detailed agricultural account showing production dropping by about 20 percent from previous-year levels and contributing to the record global rise in the price of food. Coinciding droughts in major wheat-producing regions of North America and Europe have forced the price of wheat and bread sharply higher while putting pressure on substitute products such as rice. The Russian government said grain exports through the end of August had fallen to 4.6 million tonnes from the 5.7 million tonnes recorded in the same period last year. The wheat harvest shrank to 32.3 million tonnes this year compared to the 39.6 million tonnes recorded at the end of August 2011. Fyodorov and First Deputy Prime Minister Arkady Dvorkovich rejected the idea of Russia reapplying export bans it imposed for nearly a year during an even more damaging drought in the summer of 2010. "As long as I still continue to oversee this field, I will fight any limits on grain exports," RIA Novosti quoted Dvorkovich as saying. "We are not planning such measures. I am talking about the upcoming agricultural years," the senior cabinet member said. "I second that," Fyodorov was quoted saying at a joint press conference. Analysts at the time said that Russia's 2010-2011 export shortfalls helped fuel the social unrest in the Middle East and north Africa that eventually turned into the Arab Spring revolts and toppled several governments. This year's drought conditions are also putting a strain on the Russian economy and leading to price rises that could worry the Kremlin in a year that has seen the largest political protests in Moscow since Soviet times. Russia went into the year expecting to match its 2011 output level of nearly 95 million tonnes of grain. But an early winter frost quickly put that target out. Output figures began being downgraded again in recent weeks once the scale of the summer drought became clear.