News: The Russian government, which is reeling under a drought that reduced grain yields by more than a quarter, will not put a limit on exports even if its exportable surplus is exhausted, said Deputy Prime Minister Arkady Dvorkovich. Due to rapidly declining crop forecasts in recent weeks, markets were expecting a blanket ban. Russia had barred grain exports for almost a year after similar weather in 2010. However, trade analysts feel that Russia will use market interventions to lower domestic prices if the surplus ran out and expected to happen as early as October-November 2012.
BMI View: Food consumption in Russia is expected to grow strongly over the five years to 2016. Interestingly, of the BRIC countries, Russia's, along with India's, per capita GDP is expected to grow at the quickest rate - both showing roughly 85% year-on-year growth over the five years to 2016. With a population in excess of 140mn, Russia is Europe's biggest consumer market, and although it does not carry quite the phenomenal long-term appeal of fellow BRICs China and India in particular, it continues to attract significant interest from multi-national corporations.