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. Last Updated: 07/27/2016

Grain Imports to Be Slashed by 38%

The Russian government plans to cut its imports of grain this year by almost 38 percent, in part because it lacks the foreign credits to buy more.

Sergei Glazyev, minister of foreign economic relations, announced in a government memorandum Thursday that Russia will import 16 million tons of grain this year, down from 25. 6 million tons in 1992, Interfax reported.

Russia bought grain from the United States and Canada on credit last year, but further credits have been frozen because Russia is not paying its debts. Russia has defaulted on $260 million in grain purchase payments from the United States, with another $200 million due this month, according to the U. S. Agriculture Department. Russia owes Canada another $100 million.

When Russia first defaulted last fall, the United States held up credits until Russia paid. But Russia is now defaulting continuously and the credits have remained frozen.

Russian ministry officials told Interfax that obtaining foreign credits will be difficult this year since the country still has not paid for its previous imports.

The former Soviet Union used to account for 20 percent of U. S. grain exports. In total, Russia, Ukraine and other former Soviet republics have borrowed $4 billion from private U. S. banks since January 1991, most of which was guaranteed by the U. S. government.

Russia has tried to find new suppliers such as Australia and France. In late January, after Russia paid off its debts for 1991 and 1992, France promised credits for 2. 3 million tons of wheat and 300, 000 tons of barley, Izvestia reported. Russia also buys grain from Kazakhstan, which had a record harvest of 32 million tons last year and has indicated it could sell as much as half of its future harvests to Russia.

Russia managed to boost its own harvest in 1992 to 117. 3 million tons, up from 99. 3 millions in 1991. A good harvest this would help the country reduce its imports this year.

Glazyev revealed plans to allocate a total of $6. 1 billion for food imports, including vegetable oil, butter, sugar and medicine, Interfax reported.

But while he would like to spend $10. 2 billion worth of machinery for the energy, agriculture and consumer goods sectors, Glazyev said that his ministry could only afford $1 billion in hard currency.