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Russia Won’t Impose Grain Export Duty, Ukraine Must Replant

Feb. 3 (Bloomberg) -- Russia shelved plans to tax grain exports from April after cereal output exceeded forecasts, easing concerns of supply curbs that helped lift wheat prices, even as Ukraine said it will need to replant winter crops.

“Russia’s government doesn’t see grounds for any kind of grain export restrictions in April,” First Deputy Prime Minister Viktor Zubkov was cited as saying in a statement on the government’s website today.

March-delivery milling wheat in Paris has risen 16 percent since Oct. 11, when Zubkov said Russia might impose duties to restrict grain exports in a bid to control inflation once they reached 23 million to 24 million metric tons. The country now expects to export 27 million tons in the 2011-12 season.

“It is good for exporters because they were afraid of signing contracts with deliveries in April,” Andrei Sizov Jr., managing director of SovEcon, a research company, said by phone from Moscow. “Russia will be now actively present at tenders with grain deliveries for April.”

Wheat for March delivery was little changed at $6.6275 a bushel on the Chicago Board of Trade at 7:39 p.m. Paris time. Prices have dropped 23 percent in the past year as Russia boosted export supplies after lifting an export ban in place since a crop-wasting drought in 2010.

Crop Forecast

The grain crop is estimated at 93.9 million tons, Zubkov said, compared with his October forecast for output of between 90 million to 92 million tons. Russia will be the world’s third-largest wheat shipper behind the U.S. and Australia in 2011-12, the U.S. Department of Agriculture estimates.

Russia probably won’t have a duty at all this season, Sizov said. Snow cover in Russia’s southern regions means there are no “serious” losses expected for the winter crops, he said.

Ukraine, the second-biggest grain grower in the Black Sea region after Russia, will need to replant at least half of its winter grains after freezing weather this week destroyed plants, according to Tetiana Adamenko, head of agro-meteorology at the country’s national weather center.

Soil temperatures dropped to minus 20 degrees Celsius (minus 4 degrees Fahrenheit) for more than two days in the Dnipropetrovsk region, where 44 percent of planted grain failed to emerge after an autumn drought, Adamenko said by phone from Kiev.

Ukraine’s Agriculture Ministry estimated about 8.4 million hectares (20.7 million acres) of winter grains, mostly wheat, was planted for the 2012 harvest. About 7 million hectares had sprouted as of Jan. 26 and 1.9 million hectares had plants in good condition.

To contact the reporter on this story: Marina Sysoyeva in Moscow at Kateryna Choursina in Kiev at

To contact the editor responsible for this story: Claudia Carpenter at

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