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No grain deficit in Russia, Prime Minister says

08/27/2010 @ 7:54am

DJ Russia Has More Than Enough Grain - Prime Minister Putin

DJ - 39 mins ago

MOSCOW (Dow Jones)--Drought-stricken Russia has no grain deficit and there is no reason for the recent surge in grain prices, Prime Minister Vladimir Putin said Friday, local news agencies reported.

"After the poor harvest, the question naturally comes up regarding a possible deficit," Putin said. "There is no deficit and there will not be."

Russia has over 9.5 million metric tons of grain in reserves, and an additional 21 million tons in carry-over stock, while conservative estimates for this year's harvest are at 60 million tons. This should be enough to cover the country's internal demand of 77-78 million tons, Putin said.

Russia's worst drought in decades has destroyed 27% of this year's grain harvest, raising speculation that the country wouldn't be able to meet internal demand.

In a bid to stabilize the market, Russia banned all grain exports starting Aug. 15, although this has failed to curb domestic price growth so far.

There was "absolutely no reason" for the surge in domestic grain prices, Putin said.

-By Ira Iosebashvili, Dow Jones Newswires; +7 495 232 9195; ira.iosebashvili@dowjones.com

(END) Dow Jones Newswires

August 27, 2010 08:05 ET (12:05 GMT)

Copyright (c) 2010 Dow Jones Company, Inc.

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