Russia may be the cause of food insecurity in the world. Restrictions on grain exports, despite the existence of demand from key foreign buyers can lead to a global shortage of wheat. This was reported by Bloomberg. Meanwhile, the closure of the “grain of the crane” will come out sideways for the domestic market. The lack of facilities for storage of goods will force domestic farmers to rent additional warehouses, which will affect the final cost of grain and, as a result, flour and bread on the shelves.
Russia in past years has become one of the leading exporters of grain. Domestic producers supply annually abroad for about 43 million tonnes, of which 35 million tons is wheat. At the beginning of this year, the Ministry of agriculture predicted export growth to 45 million tons. However, the pandemic has made adjustments to the work of the grain market. The Russian agricultural Ministry has imposed quotas on exports of wheat, corn, rye, barley. It was assumed that until the end of June the country will take no more than 7 million tons. However, all of these volumes were bought already by April 26. A restriction on exports, the authorities explained the protection of its own market. The agriculture Ministry believe: first, such a measure would reduce domestic cereal prices, and secondly, quotas are needed to ensure the country’s food security.
According to the chief analyst of Teletrade Mark Goichman, quotas were caused by the fact that in the spring sharply increased the price of grain exports. “Paradoxically, the dollar value of wheat exceeded the price of oil. In such circumstances, the farmers became more profitable to sell grain “over the hill” to the detriment of the internal market, — the expert emphasizes. — At the same time it was necessary to take into account the increased demand in Russia, the possible reduction in future harvest due to the dry winters, the uncertain prospects of the food market in a pandemic. The government decided to restrict the export of grain as a strategic resource of food to meet the needs of our market.”
the Boom in foreign markets and the concerns of other countries regarding the Russian export of grain due to the fact that on the background of the pandemic in the fashion industry, there are increasing concerns about food shortages. But, meanwhile, in the world there are other suppliers of wheat. The US, for example, restrictions on grain exports was not imposed. So the demand can be partially satisfied through exports from other States.
Traditional buyers of Russian grain are numerous — dozens of countries in America, Africa, Asia, Europe, including the CIS. In many of them the share of deliveries from Russia to import grain is very high. For example, it ranges from 60% to 100% in Turkey, Egypt, Sudan, Iran, Mongolia, Albania, Nicaragua, Syria and Qatar. “Export restrictions will affect these countries, but are unlikely to lead to disaster, says mark Goikhman. — Key delivery for the current year from Russia has already been made. The remaining imports can be complemented by other suppliers. In addition, new crop export from Russia since July 1, the constraint is not yet distributed”.
our country has restricted the export of grain in 2010, when the peat bog fires across Russia, and a very hot summer could lead to crop failures. Then prices in the domestic market has not dropped, but increased after the decision on quotas. “This is reflected in the cost of food prices rose, inflation jumped, the flour has risen by 18%, bread by 10%. The cost of consumer basket in Russia increased by 20-30%”, — says the Executive Director of the Goldman Group Dmitry Helmersen. Then some foreign analysts believed that a ban on grain exports from Russia was one of the reasons the beginning of the “Arab spring”: the lack of wheat and other crops caused a rise in food prices in several countries, where he started riots, and the government was ousted.
Today’s export restrictions have a negative impact on the domestic market. “The lack of storage capacity has forced the company to rent additional warehouses, which will affect the final cost of the grain, — Elementin. — Risk further collapse of relations with foreign partners: communication improving for many years, Russia may lose its credibility. Moscow’s decision has already affected global grain prices, which jumped by 23% compared to the same period last year.”