By Gleb Bryanski and Denis Dyomkin
MOSCOW/SARATOV, Russia, Sept 2 (Reuters) - Russia abruptly
signaled on Thursday it would extend a grain export ban until
late 2011 and ordered authorities to prevent speculators driving
up food prices after the worst harvest in years.
Prime Minister Vladimir Putin's surprise statement on the
export ban -- which had been due for review after Dec. 31 --
puzzled analysts and helped send benchmark Chicago wheat prices
"I would like to note that the lifting of the export ban can
only be considered after next year's crops have been harvested,"
Putin told a government meeting. Amid speculation that he might
have misspoken, his spokesman confirmed the statement.
Russia banned grain exports from Aug. 15 to Dec. 31 as a
historic drought drove grain harvest forecasts down to about
two-thirds of last year's figure, stoking fears of sharp
food-price increases that could become a political liability.
In a sign of jitters, President Dmitry Medvedev ordered law
enforcement agencies to stop speculators driving up prices and
and pledged help to ensure affordable food staples.
Putin's statement indicated the grain export ban would be
extended by many months. Russia will harvest next year's crop by
Surprised analysts said Putin might have meant to refer to
the 2010 harvest. "It may well be a slip of the tongue," said
Andrei Sizov Sr, CEO of SovEcon agriculture analysts.
But Putin's spokesman Dmitry Peskov, asked whether Putin
meant the ban could not be lifted until next year's crop is
harvested, told Reuters, "That was what was announced by Putin."
The Kremlin has sent mixed signals about the ban. Medvedev
said last month the ban could be lifted before its planned Dec.
31 expiry, depending on the harvest while Putin had said it
could last into 2011.
This year's harvest is expected to fall to 60-65 million
tonnes, after what the state weather agency says is Russia's
worst drought in over a century ,from 97 million tonnes in 2009,
although officials say there is enough grain to feed the people.
Russia's leaders are worried that recent price rises for
staples such as flour, buckwheat, pasta and meat following the
worst drought in at least a century could undermine the
Kremlin's support ahead of the 2012 presidential election.
The summer drought will lead to a "price shock" for three to
six months though inflation should be 7 percent for the year, the
central bank said on Thursday.
Medvedev, meeting senior government and regional officials,
said speculators were driving up prices for certain foods.
"The speculators need to be caught," Medvedev said at the
meeting in Saratov, a city on the Volga river in an agricultural
region hit by the drought. "There are no objective reasons for
the current changes in price" for food products.
"The situation should be kept under control by the
government and regional leaders... If the situation changes I
will take the decision to ensure our citizens have quality and
affordable food... This is a priority for the state."
Medvedev said Russia, the world's third largest wheat
exporter before this year's poor harvest, would seek to regain
its position on world markets in the future.
Agriculture Minister Yelena Skrynnik set an ambitious target
to increase the harvest to 85-90 million tonnes of grain in
2011. Medvedev said there was enough grain with carryover stocks
of some 21-25 million tonnes.
Medvedev has toured villages, dairy farms and meat
processing plants in recent days in a bid to reassure Russians,
who still remember the empty shelves and soaring food prices
around the time of the 1991 collapse of the Soviet Union.
Medvedev said he was particularly concerned about the price
of buckwheat, which millions of ordinary Russians eat often.
"People are buying up this buckwheat from big retailers in
the evenings, using sacks to fill up their trucks, and then
selling it in small shops and markets," Medvedev said.
"Those who are involved in hiking up prices, ... in earning
unjustified profits, should be dealt with by prosecutors, by the
police, by the anti-monopoly and tariff services," he added.
The Russian ban and grain export restrictions in Ukraine
have sent world prices soaring. But Ukraine's wheat exports
nearly doubled to 430,000 tonnes in August despite informal
export limits by the customs service, analyst UkrAgroConsult
said on Thursday.
(Writing by Guy Faulconbridge, Toni Vorobyova and Steve
Gutterman; additional reporting by Aleksandras Budrys, Pavel
Polityuk, Oksana Kobzeva, Conor Humphries and Tatiana Ustinova;
editing by Elizabeth Fullerton)