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Russian grain embargo decision within days

05/26/2011 @ 7:20am

MOSCOW (Dow Jones)--The Russian government will decide within days whether the ban on grain exports is to be lifted July 1, Deputy Prime Minister Viktor Zubkov said late Wednesday in an interview with the Russia 24 television channel.

Zubkov said there was "a large degree of probability" that the embargo would be lifted. He said the expected 85 million-90 million metric tons harvest this year and the remaining 17 million tons of grain from last year's harvest ensured there was sufficient amount of grain in the country, which made the export embargo unnecessary.

Zubkov also said winter crops wintered well and were in good condition, and spring crops planting was also going well, faster than last year.

Russia banned grain exports last summer after the worst drought in more than a century slashed the harvest by around a third, to 63 million metric tons. However, speculation has been building that the government may soon lift the embargo due to falling internal prices and hopes for a 90-million-ton harvest this year.

Russian domestic grain prices continued to stabilize last week, reversing an earlier long-term trend of falling prices, according to data from the SovEcon agricultural markets analysis body.

SovEcon attributes the stabilization to increasing demand from grain traders, who are accumulating wheat in the expectation that the government will soon lift the export ban.

-By Grigori Gerenstein, contributing to Dow Jones Newswires; gerenstein@hotmail.com

(Neena Rai in London contributed to this article)

(END) Dow Jones Newswires

May 26, 2011 05:58 ET (09:58 GMT)

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