Embassies, trade missions to help push Russian grain to int’l markets.

25/7 Tass 324

MOSCOW, July 25 (Itar-Tass) —— President Dmitry Medvedev said he would ask the Foreign Ministry to instruct the Russian embassies and trade missions abroad to assist Russian grain companies in making their way to world markets.

Speaking at a meeting on the situation on the grain markets, was which chaired by Medvedev on Monday, July 25, Russian Grain Union President Arkady Zlochevsky suggested that Russian embassies and trade missions abroad help move Russian grain to international markets.

Zlochevsky said Russian companies are facing big problems as they are returning to foreign markets.

“We need help: upon return to world market, we encountered tremendous difficulties, the main of which being that competitors have already taken up our place and they did so using political instruments. They have engaged all means – governmental, political, embassies and trade missions – in order to push their products to foreign markets,” he said.

“We ask you to give an order that embassies and trade missions help us regain our place in the sun which we once occupied,” Zlochevsky said, speaking to Medvedev.

He also suggested holding a second World Grain Forum. The first one was held in St. Petersburg in 2009. “There are plans to hold it in the summer of 2012 in St. Petersburg as well,” Zlochevsky said.

Medvedev believes that Russia would be able to boost its grain export potential this year.

“About 20 million tonnes of grain had been harvested by the middle of July, and the weather is quite favourable,” the president said.

“If you keep this pace, we will get the expected 90 million tonnes and even slightly more,” he added.

“We will not only meet our own grain needs this year, but we can also return to the question of boosting Russia’s export potential,” the president said.

The government lifted the ban on the export of grain from July 1. The ban was imposed last August because of a sever drought in several grain-producing regions. In 2010, the grain gravest was down by 37 percent from the previous year to 60.9 million tonnes.

First Vice Prime Minister Viktor Zubkov agreed that Russia can export 2 million tonnes of grain in 2011.

As of July 1, Russia was exporting grain to 27 countries, including Turkey, Egypt and Africa.

“Today we are exporting to 33 countries: European countries have been added up – Italy, Spain, the Netherlands, all of the Transcaucasian republics, including Georgia and Armenia,” Zubkov said.

He said there are requests from other countries for 7 million tonnes of grain.

Zubkov recalled that by imposing a ban on the export of grain Russia never stopped the export of flour. “About 600,000 tonnes of flour were exported,” he said.

Flour is a product with a 25-30 percent added value, and producers have already felt the benefits of its export.

“We should think about how to stimulate those who export flour in order to increase it,” Zubkov said.

“The situation is favourable for export,” he added.

“Last year was very hard in terms of weather” and “we lost the biggest part of grain, potato and other crops” because of unprecedented summer drought in 40 regions of the country, he said.

However measures taken by the government helped to “support the financial stability of agricultural enterprises,” he added.

Earlier Zubkov said the government was studying the possibility of extending the embargo on grain exports until the end of the year because there was no serious “subject” for discussion on the lifting of the grain export ban before all crops were harvested and counted.

Deputy Minister of Economic Development Andrei Klepach said Russia might lift the ban on grain export if it harvests at least 80 million tonnes of grain in 2011.

“With a harvest of at least 80 million tonnes we will be able to export. This level allows us to enter the market with grain export offers,” Klepach said.

He recalled that the ban would be effective till the end of the 2010-2011 agricultural year.

In his opinion, it will be possible to discuss a possible lifting of the ban in a month’s time. “This will be clear in the spring. If the harvest is good, as we expected – the forecast in the autumn was 8-85 million tonnes – then we will be able to export,” he said.

In order to stabilise prices and meet grain demand inside the country, the government decided to ban grain export. The ban was necessitated by a severe drought that killed crops in many Russian regions, reducing harvest projections from 97 million tonnes at the beginning of the year to 60-65 million tonnes.

Earlier Russia planned to increase grain export in 2010.

Zubkov recalled that Russia had been harvesting about 100 million tonnes of grain in recent years, with domestic consumption staying at around 80 million tonnes.

Russia has a substantial export potential on the international grain markets and can continuously export up to 30 million tonnes of grain a year, Zubkov said.

Russia exported 23 million tones of grain in 2008 and 20 million tonnes in 2009. Russia’s grain harvest may amount to 85 million tonnes in 2011, Zubkov said.

This amount would be enough to meet the domestic grain demand and resume grain exports, he said.

Russia needs no less than 85 million tonnes of grain to meet the annual domestic demand.

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