The ban on exporting grain from Russia has ended, leading the Central Bank to consider a number of options to control the market situation.

Russia introduced the ban in August of last year as drought and wildfires resulted in a substantial decrease in the country’s grain yield. To avoid a national shortfall in grain supplies following the loss of around a third of the nation’s crops, the country imposed an export ban

Now, as this is lifted, Sergei Ignatiev, chairman of the Central Bank, explained that inflation could become a problem for the Russian economy. To negotiate the situation, he proposed the introduction of a temporary duty on grain, which has been supported by the Ministry of Economic Development and the Ministry of Agriculture.

In addition to curbing inflation, the Central Bank chairman suggested that duties could help to maintain steady supplies of basic foodstuffs for the domestic market.

However, it isn’t just the Russian economy that is taking note of the change. The international market has responded with a steady decline in European wheat futures ever since it was confirmed in May that the ban was to be lifted.

Andrei Sizov, chief executive of Moscow-based agricultural consultancy, told the Financial Times that market uncertainty will prompt Russia’s grain traders to increase foreign trade. “The threat of restrictions will force them to export as much as possible once the ban is lifted,” he remarked.

But this view is not shared by Tim Hannagan, an analyst with PFGBEST in Chicago, who told the Rossiyskaya Gazeta that Russia “will not dump huge volumes of grain on the market”. “Last year it endured a genuine disaster, therefore a large part of the production will go to the domestic market,” he explained.