Azerbaijan, Baku, August 6 /Trend, I.Khalilova/
Russian government's imposing a temporary ban on grain exports will not bring to rise in prices in the domestic grain market of Azerbaijan, the head of department controlling production and processing of crop products of the Agriculture Ministry of Azerbaijan, Sabir Veliyev, told Trend.
"Azerbaijan imports grain mainly from Kazakhstan, and contracts have already been signed with the Russian suppliers. Regardless of the restrictions on the grain export from Russia, the signed contracts will be implemented, since the payment on them has already been made," said Veliyev.
Monthly Azerbaijan imports 87,000 tons of grain, part of which is provided by Kazakhstan. Since the beginning of 2010, Azerbaijan has imported 520,000 tons of grain, with 15 percent from Russia, and the remaining volumes from Kazakhstan.
Rising in prices in the local grain market can be avoided even due to expected abolition of VAT on imports of grain, for which the Agriculture Ministry has appealed to the government. Since the beginning of 2010, Azerbaijan has been introducing VAT on imports of grain: one ton of grain amounting to $480 is taxed at 18 percent - $86.4 per ton of imported grain.
The price of grain per bushel is expected to increase up to $10 because of the temporary ban on the export of Russian grain. Last time the grain price reached this figure in March 2008 at the beginning of the global crisis, which provoked an increase in food prices in 2007-2008.
Imposing a temporary ban on the export of Russian grain significantly affected the grain price on world commodity exchanges. In particular, on Thursday the price of grain futures on the Chicago commodity exchange reached 23-month maximum, increasing 6.5 percent to $8.68 per bushel. At the same time, the grain trade on the Paris stock exchange, which is the largest grain market in Europe, also broke the record for the volume and the variation in prices after Russian Prime Minister stated imposing a temporary ban on grain exports. The grain price on Thursday reached 223.25 euros per ton.
In general, grain prices in Europe on Thursday rose 12 percent, reaching 236 euros per ton and updating records in sales. Grain future prices in the U.S. grew by 80 percent, which was a record increase over the past 40 years. Furthermore, prices rose not only for grain, but also for other crops such as barley, corn and canola.
Bloomberg Agency reported that Russia's ban could open new opportunities for competitors - the U.S., the largest grain exporter, as well as for Australia and Argentina. Overall, less than two months, grain prices in the world have grown twice because the severe drought has affected crops in the territory of Russia, Kazakhstan, Ukraine and the EU, as well as torrential rains, which have greatly influenced the production of this product in Canada, which is also the world's "grains" leader.
This year, Azerbaijan increases the volume of imports because of the natural disaster in the Aran (central) parts of the country where the crop area were flooded, so the country's demand for grain crops is expected to be covered due to grain imports.
In 2010, Azerbaijan will collect approximately 2,000,000 tons of grain, with 1.3 million tons food grain, said the head of Ministry's department.
"Given that the country's grain need is 1.5 million tons, the remaining volumes are planned to be covered at the expense of grain imports, particularly from Kazakhstan," said Veliyev.
According to the press service of the Ministry of Agriculture of Kazakhstan, in the first half of the year, the volume of Kazakh grain supply to Azerbaijan amounted to 547,800 tons, almost twice more than the volume exported last year (256,600 tons).