Russia says grain export ban not on the agenda

Russia, one of the world’s largest wheat exporters, said on Friday it was not considering grain export curbs as an option to balance domestic demand during the 2014/15 marketing season.

Arkady Zlochevsky, head of Russia’s Grain Union, said earlier that Russia’s Agriculture Ministry made such a proposal in a letter addressed to Prime Minister Dmitry Medvedev. Reuters also obtained a copy of the letter, dated Aug. 26.

“The issue is not on the agenda,” Deputy Prime Minister Arkady Dvorkovich was quoted as saying by Itar-Tass news agency on Friday.

Dvorkovich’s spokeswoman Aliya Samigullina told Reuters the government was not considering grain export restrictions as it would only use market methods of regulation.

Samigullina said the letter from Agriculture Minister Nikolai Fyodorov to Medvedev included a list of options related to monitoring the grain market situation, not proposals.

Russia shocked grain markets with a one-year export ban in 2010 when drought ravaged that year’s harvest. The move was a catalyst for a rise in grain prices and political instability in the import-dependent Middle East and North Africa.

After the 2010 ban, many Russian officials including Fyodorov, Medvedev and President Vladimir Putin, said repeatedly it would not happen again.

“Even the consideration of a question like this does harm,” Zlochevsky told Reuters. “There should be no discussion of a ban because it frightens our buyers.”

The Agriculture Ministry said earlier on Friday it did not send the letter, while a spokeswoman for Medvedev said Russia’s government had not received it.

The letter seen by Reuters said restrictions could come in if exports exceed 26.9 million tonnes out of an expected crop of 100 million tonnes. Russia has exported about 7.3 million tonnes of grain since the start of 2014/15 year on July 1.