MOSCOW - Moves by the European Union to stem a flood of grain imports from Russia and Ukraine will force the two countries to shift shipments to other destinations, Moscow and Kiev analysts and officials said on Wednesday.
But EU import quotas, which the 15-nation bloc unveiled overnight and plans to introduce from January, will not greatly reduce Russian and Ukrainian exports as deliveries to other markets would make up for lost European sales, they said.
"We have already changed the destinations for our grain exports - we are now supplying grain to Egypt, Brazil, Algeria, Tunisia, Morocco and other states," said Ukrainian Agriculture Minister Serhiy Ryzhuk.
"Even if we are cut from Europe altogether from January, we will use other markets," said Igor Pavensky, an analyst at Russia's Institute for Agricultural Market Studies. "And we will also keep exporting grain intensively to Europe until January."
The European Commission said on Tuesday the EU would allow from January 2,981,600 tonnes a year of low-and medium-quality wheat to be imported at a favourable tariff rate of 12 euros a tonne.
Within this, the United States would take an allocation of 572,000 tonnes and Canada 38,000 tonnes.
The rest of the wheat quota would be open to other countries, while imports outside the quota would have a 95 euro tariff, the commission said.
RUSSIAN EXPORTS TO STAY HIGH
Analyst SovEcon said even if exports to the EU stopped, Russia would still export nine to 10 million tonnes of wheat, increasing shipments to traditional buyers - Egypt, Algeria, Morocco, Tunisia, Israel, Lebanon and Syria.
"There will also be substantial shipments to Iran, no lower than 250,000-300,000 tonnes, and a boost of low quality wheat supplies to South Korea," SovEcon's Andrei Sizov said.
"Russian wheat prices are low now, but they are still higher than production costs and therefore can be cut even further."
And Russia could still export to the EU within the quota, although competition from Ukraine would be tough, he added.
Russia exported around 4.2 million tonnes of wheat in the 2001/02 season.