Russian gov. considering Eurasion Union grain export suspension

The Russian government is considering banning all grain exports to the Eurasian Economic Union until September, local media has reported Thursday, citing comments from a government source.

The move, if true, suggests problems amid Russia's domestic supply arrangements after Agricensus analysis suggested some members of the bloc had seen an increase in imports of Russian wheat, pulses and other products in recent weeks. 

The government could temporarily suspend the export of wheat, barley, rye, and corn to the other countries within the bloc as soon as March 15 with the ban running through to August 31.

An official document confirming the measure was being prepared, according to the reports.

However, some exports are still expected to be allowed within the existing licenses that have already been received by the Russian agriculture ministry.

Exports to the Eurasian Union, which is made up of Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan as full members, are free of taxes and quotas, a benefit that has meant imports into Kazakhstan, Belarus and Azerbaijan have increased significantly in recent months.

“Each country regulates its exports independently. And Russia has no right to tell Kazakhstan that they bought my grain so do not take it out of your territory,” a broker told Agricensus.

“Therefore, the only way to prevent gray schemes for the export of grown grain without duties from the territory of the Union is to close transit zones for it,” the broker said.

Kazakhstan has already imported a record amount of Russian grains - some 2.3 million mt, or a 6% year-on-year increase, with the full volume including 1.9 million mt of wheat.

Grain exports to Belarus have also doubled to 700,000 mt, while Azerbaijan has increased its purchase by 2% to 900,000 mt, according to data.

However, any potential block on exports comes at a time when Russian exports have slowed significantly following the country's invasion of Ukraine on February 24.

Russia is likely to need to bring revenues into its budget as it deals with ferocious international economic sanctions.