Russia will lift a grain export ban from July 1, Prime Minister Vladimir Putin said on Saturday, bringing what was formerly the world's third-largest wheat exporter back to world grain markets. Russia expects the grain harvest to be "quite good" this year and sowing is better than last year, First Deputy Prime Minister Viktor Zubkov, who oversees government agricultural policy, told Putin. "We shall lift the grain export ban from July 1," Putin said, adding that Zubkov should monitor the situation and ensure domestic farmers were given proper support to cope with the lifting of the ban. He gave no specifics. Putin, Russia's paramount leader, announced a ban on the export of grain and related agricultural products on August 5, 2010, effective through to July 1 of this year, after the worst drought in over a century devastated Russian crops. Russia officially expects to harvest 85-90 million tonnes of grain this year after the drought cut its grains crop to 61 million tonnes in 2010 from 97 million in 2009 and 108 million in 2008. Russia's lifting of the ban is important for producers, grain traders and even hedge funds who are trying to forecast supply as concerns mount about deteriorating harvests in other key producers including Europe and the United States. A pick-up in shipments from Russia, which has been a key source of low-cost grain for many importers, could drive down prices which remain far above levels traded a year ago before drought led Russia to halt exports. Wheat futures on the Chicago Board of Trade slipped on Friday as traders took profits after a strong two-day rally. Russian farmers have already sown 24 million hectares this spring, or 10 per cent more than by the same time last year, Zubkov told Putin. He did not specify what had been sown. "The condition of the winter crop is satisfactory and we believe that this year the grain harvest will be quite good," Zubkov said, adding that in southern Russia significant volumes of grain could be exported from July 1. Allowing exports to resume from July 1 would relieve oversupplied farmers in the southern region, who cannot ship to deficit regions due to a lack of infrastructure and fear they will not have enough space in silos when the new crop comes in late July. Zubkov said officials would monitor the domestic market to ensure prices remained far below world prices, adding that Russia had more than 6 million tonnes of grain ready to intervene in the market should it need to. The Russian Grain Union, a powerful industry lobby, sees Russia's exportable surplus at over 15 million tonnes in the 2011/12 crop year, which begins on July 1.
