Investor explains grain and sugar export ban

Russia has temporarily banned grain exports to the EAEU as well as white sugar and crude cone sugar exports to third countries, according to the press service of the Ministry of Economic Development.


This decision of the Ministry of Agriculture is in response to several factors, according to Fyodor Sidorov, private investor and founder of the School of Practical Investment.

First of all, by prohibiting exports of certain agricultural products, the government creates surplus stocks inside the country. Carryover reserves of grain, sugar and other products will grow. In the conditions when the entire world is expecting food shortages due to disrupted supply chains and reduced exports from Russia and Ukraine, our country is building extra strategic reserves, the expert explains.

Second, the Ministry of Agriculture sees the obvious: navigation in the Black Sea is complicated due to sanctions and, consequently, Russian exports are also experiencing difficulties as the Black Sea ports are the main trade ports for Russian products.

Third, reducing agricultural supplies from Russia is our strong response to the foreign sanctions. Russia accounts for around 25% of the grain market and over 30% of the sunflower oil market. Russia and Ukraine together account for over 30% of the global wheat market. Fears that the amount of agricultural exports from Russia and Ukraine (where the planting season was interrupted) will reduce have already caused price hikes around the world.

“For the domestic market, the Agriculture Ministry’s decision means that the government will not allow shortages and, therefore, can effectively counter the food crisis that is breaking out in the world. Our country is fully resourced when it comes to agricultural products and has extensive stocks to compensate in case of low harvest, climate issues, etc.,” Fyodor Sidorov concludes.

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