Russian President Vladimir
Putin’s decision to stop grain exports to rein in inflation will boost sales of
wheat from the European Union and Ukraine, two political adversaries, an
analyst said. Bloomberg reports:
Putin’s latest
economic policy - taxing exports to stem inflation fuelled by his 2014 ban on
EU imports - will effectively end Russian grain sales, removing a competitor
for European producers, said Shawn McCambridge, a grain industry analyst with
Jefferies LLC in New York.
“Banning exports is
the kiss of death” to customers who want reliable supplies, he said.
“If the European
Union has the quality, they’ll be big beneficiaries of Russia’s policy.”
Agricultural
forecasts are reflecting Russia’s planned February 1 imposition of duties on
grain to reduce overseas shipments after the rouble plunged and food prices
rose. Russia is the world’s fourth-biggest shipper of wheat.
The US Department of
Agriculture on January 12, citing the tariffs, increased its estimate for EU
wheat shipments this year and lowered the Russia forecast for this marketing
year. EU nations together are the biggest single shipper of grain, supplying Africa,
Asia and the Middle East.
Ukraine also will
benefit, the USDA said, and raised its estimate for the sixth-biggest wheat
shipper. Ukraine is meeting with traders to discuss the pace of exports and has
no intentions of imposing curbs, Agriculture Minister Oleksiy Pavlenko said
this week in an interview.
Ukraine may be
hindered in capitalising on a fall in Russian exports, Vince Peterson, vice
president of overseas operations for the trade group US Wheat Associates, said
in a telephone interview. Quality issues and the risk of rising food prices in
Ukraine may discourage shippers from exporting, he said.
Russian food
inflation jumped 44 percent in the year through November, in part because of an
August ban on imports from the EU to retaliate against Putin for actions in
Ukraine, including the annexation of Crimea and support for continuing conflict
in the region.
Read the article HERE.
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