According to the decision of the Ministry of Agriculture of the Russian Federation, next year the export of grain (wheat, rye, corn and soybeans) will be sharply limited.
In the period from February 1 to June 30, 2021, all exporters will be able to sell abroad a total of no more than 15 million tons of grain.
Quotas will be issued on a historical basis. You will have to apply to the Ministry of Agriculture for permits.
The restriction applies to trade with countries outside the EAEU (Russia, Belarus, Kazakhstan, Armenia, Kyrgyzstan).
For the first time since 2010, Russia introduced restrictions on grain exports in the spring of 2020 in connection with the coronavirus pandemic.
In this situation, the country’s food security has received a higher priority than profits from foreign trade.
The result was an export restriction of 7 million tons (from April 1 to June 30, 2020). This is a very small amount: this quota was fully used by exporters by April 26, 2020. All other grain reserves that could have been sold before June remained in the country.
Restricting exports is the only way to contain price increases.
The main task of the Ministry of Agriculture, in addition to ensuring sufficient food supplies in the country, is to limit price increases. Including for grain.
Currently, one ton of 3rd class wheat costs about 17,700 rubles. And this is almost one and a half times higher than it was a year ago. And even if we compare with May 2020, when the first stage of the pandemic was already over, the price of wheat increased by 1,500 rubles per ton (in May it was about 16,200 rubles) …
A rise in the price of grain will inevitably lead to a chain reaction: an increase in prices for bread, baked goods, meat and dairy products (since grain is feed for livestock).
As noted at the Institute for Agricultural Market Studies, today only two factors restrain the rise in grain prices: the efforts of government agencies and the drop in demand due to the fact that many consumer companies (cafes, restaurants, bakeries, pastry shops) could not survive the pandemic.
In fact, today the government has no other effective instruments other than setting limits to contain the price growth. So, export restrictions are unpleasant for business, but a justified measure.
