Eurasian Economic Union (EEU) to restrict certain seed and grain exports
Photo: Reuters
The Russian government will limit grain exports to 7 million tons from April through June and re-allocate up to 83% of its state grain stockpile for domestic sale.
The measures represent Russia’s attempt to stabilize domestic grain markets. As a result of COVID-19, instability in the domestic grain market has led to price increases. The increases in price can be explained for two reasons: panic buying by consumers and a fall in the value of the ruble against the dollar.
Russia has heeded calls from Russia’s union of Flour millers to implement an export ban but has still refrained from using similar export curbs employed after a devastating drought in 2010. Russia’s ban correlates to amounts it already expected to export this period.
This ban will likely not have any impact on the market. However, volatility in the oil market drastically impacts the value of the ruble, and a negative change in weather conditions results in lower grain production. Depending on the future of oil prices and weather conditions, the Russian government may use export taxes or further restrictions to counteract increasing prices in the domestic grain market.
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