By Michael Hogan

HAMBURG, Aug 5 (Reuters) - Russia's announcement of a grain
export ban means existing deals may be torn up and rival sellers
will scramble for the country's drought-hit supply contracts,
traders and analysts said on Thursday.

Russia stunned global grains markets on Thursday by saying
it would ban grain exports Aug.15 to Dec.31, a move applying to
contracts already signed after the worst heatwave on record
ravaged the country's harvest.

Cheap Russian wheat has massively expanded sales to global
markets in recent months, buoyed by bumper harvests in 2008 and
2009 and making inroads on shares enjoyed by the United States,
Europe and Australia.

Exporters said based on their understanding of Russian
government announcements on Thursday they expected to declare
force majeure on millions of tonnes of Russian export deals.

This would enable supply deals to be cancelled because of
events outside the control of the contracting parties.

Some exporters will be pleased to declare force majeure as
they face huge losses on some contracts after selling Russian
wheat in advance before price rises in past weeks, traders said.

Wheat prices in the U.S. hit 23-month highs and in Europe
scored new contract highs on Thursday as rival exporters
expected to gain new business as Russia retreats from the global
grain export market. U.S. wheat futures have risen nearly 70
percent since the end of June.

"As we understand today, there will be an export ban from
Aug. 15 so force majeure will have to be declared on shipments
after this date," said a trader at a European export house with
major Russian export contracts.

"The (Russian) government will physically stop us from
fulfilling the contractual commitments we entered into."

A French exporter agreed: "If there is an export ban it is a
force majeure," he said.

Chris Vanhonacker, a European grain trader said: "People
will have to read their contracts in detail; how are the origins
labelled and what is the governing law."

RIVALS LICK LIPS

Observers now expect a race among Russia's export rivals to
take over the business.

Keith Flury, grains analyst at German commodity analysts
F.O. Licht, said: "For the Middle Eastern market, I think the
European Union looks well placed to fill the gap. The U.S. will
have an outside chance but will be hampered by higher shipping
costs."

"Ukraine also has crop issues and Kazakhstan is unlikely to
be willing to sell very large volumes. Asian buyers are likely
to look to Australia and the U.S."

Bill Nelson, economist with Doane Advisory Services in St
Louis, Missouri said: "The ban is going to have a positive
impact on U.S. wheat. But we are not sure at this stage how much
the increase in U.S. wheat exports will be."

He said the shortfall in Russian wheat output will boost
consumer demand for feed grains like such as corn and barley.
Nelson said the surge in prices could lead to some destruction
of demand as livestock herds are cut due to high feed costs.

EGYPT NEEDS GRAIN QUICKLY

Leading importer Egypt was seen with an immediate problem
after buying a total 360,000 tonnes of Russian wheat for Aug. 21
-Sept. 31 shipment in the past week plus 120,000 tonnes for Aug.
11-20 shipment which could fall under the ban.

Egypt's state grains buyer GASC said it would not-retender
but will seek about 60,000 tonnes a month.

"It's a big problem for the Egyptians," the French trader
said. "The Egyptians bought Russian wheat at good prices for
August and September and they need it."

Traders were also hopeful some of the business for Egypt,
the worlds biggest wheat importer, will be switched to the EU.

Market talk increased on Thursday that Russia's Black Sea
neighbour Ukraine had slowed down exports, stopping short of an
outright ban.

"Ukraine is a member of the World Trade Organisation and has
to be very careful about introducing export bans and export
taxes," a trader said.

"They have apparently introduced different measures, they
have introduced an unofficial ban on grain shipments by rail to
ports and extra re-inspections of grain cargos after loading
which makes their exports much slower."

"It is not a ban but an officially-sanctioned export
slowdown which greatly diminishes capacity to export."

A senior government minister on Wednesday said Ukraine did
not need at the moment to limit grain exports.

Cheap Russian wheat has massively expanded sales to global
markets in recent months, making inroads on shares enjoyed by
the United States, Europe and Australia.

(Reporting by Michael Hogan in Hamburg, Gus Trompiz in
Paris; Sarah McFarlane in London, Martin Roberts in Madrid, K T
Arasu in Chicago; editing by Keiron Henderson)