Wheat Sales Ban Hits Neighbors

Russia, the world's third-biggest wheat exporter, will temporarily halt exports of the grain to neighboring Belarus and Kazakhstan.

The ban will come into effect one month after it is published in Rossiiskaya Gazeta, the country's newspaper of record, and will last through April 30, the government said in a statement published on its web site Monday. Prime Minister Viktor Zubkov signed the ban on Feb. 15, the statement said.

The government approved the ban after increasing the duty on wheat exports fivefold last month to at least 105 euros ($151) per ton to curb consumer price growth. Inflation accelerated to 11.9 percent last year from 9 percent in 2006 amid rising global prices for food.

Government decrees are usually published in Rossiiskaya Gazeta several days after they appear on the government's web site.

Kazakhstan's annual inflation rate was 18.8 percent in January, according to central bank data. The central bank said Jan. 23 that it would target annual inflation of 7.9 percent to 9.9 percent this year and 7.5 percent to 9.5 percent in 2009.

The export taxes have sent the European Union's wheat exports soaring, Germany's leading trading house, Toepfer International, said Monday.

"Brisk export business of European milling wheat to third countries is being recorded," Toepfer said in a report. "Following the increase in export taxes in Russia, the volume of supplies available in the Black Sea region is falling."

But EU wheat prices were being driven up by the sharp rise in U.S. markets, it said. Concern was also growing that a larger proportion than expected of France's remaining wheat inventories would only reach animal-feed standards.

Bloomberg, Reuters