Analysts estimate Russia, usually a major grain exporter, may have to import 1.5-2.2 million tons this year, but a report in Vedomosti daily said Russia could import at least 5 million tons of grain this year

The Agriculture Ministry quickly denied that it was planning to import up to 5 million tons of grain in the 2010/11 crop year.

"Nothing of the kind is being discussed here," a ministry spokeswoman said.

Despite the denial, European and US wheat prices rose sharply, lifted by Russian import prospects that come hard on the heels of a ban on exports for the rest of this year, aimed at conserving stocks and heading off inflation.

Imports of 5 million tons would put Russia almost on a par with Egypt, the world's biggest wheat importer, as it competes in international markets, keeping up the pressure on US grain prices which earlier in August soared to 2-year highs.

Russia's deadly heatwave, which had sparked wildfires and blanketed Moscow in smog for two weeks, was declared over on Wednesday but is estimated to have destroyed a quarter of Russia's grain crop and could shave $14 billion off this year's gross domestic product.
 

The former Soviet Union, which included today's top Black Sea grain growers and exporters Russia, Ukraine and Kazakhstan, used to be the world's largest grain buyer importing dozens of millions of tons of grain every year.

In 1972, Moscow staged a "great grain robbery," emptying the US grain larder by purchasing heavily from all the major grain exporters simultaneously.

Imports stood at 34 million tons in calendar 1990, the year before the Soviet Union collapsed.

Imports since then declined sharply to less that a million tons in the last few years, but the country has never stopped being an importer, either buying grain, or receiving it as humanitarian aid after disastrous crop years like 1998, when the country harvested just 48 million tons.
 

Russia's total grain crop is officially expected to reach 60-65 million tons, although some see it struggling to get above 60 million tons this year, way down from last year's 97 million ton crop and the 108 million ton harvest in 2008.

Dmitry Rylko, director of the Institute for Agricultural Market Studies (IKAR) told Reuters his organization currently estimated domestic seasonal grain imports of at least 2.2 million tons.

He expected most of the imports to come from Kazakhstan and Ukraine, which is also considering curbing exports after its grain crops were hit by severe frosts and a scorching summer.

Kazakhstan said on Thursday Russia will be among its main export markets with 2 million tons of grain exports earmarked for Russia, Iran and other countries out of total 8 million ton grain exports expected in the current marketing year.

"We are likely to see a shift in terms of trade flows so a lot of the exports that were coming out of the former Soviet Union countries for wheat are now going to have to be met by countries like Australia, Argentina and the US," said Sudakshina Unnikrishnan, analyst at Barclays Capital.
 

Kazakhstan, along with Belarus, partners Russia in a newly created customs union, which should in theory ease trade between the countries. But neither country has chosen to join Moscow in banning grain exports.

Initial Russian demand is coming mainly from southern Siberia, the Volga region and the southern Ural mountains, regions relatively close to the Kazakh border, traders said.

"Kazakh wheat is of good quality and can be blended with Russian wheat to make excellent flour," a trader said.

As of July 1 Russian grain stocks were estimated at between 21.6 million tons and 24 million.

Annual consumption in the 2010/11 crop year is officially estimated at 78 million tons. Grain analysts expect consumption to be between 71-75 million tond depending on the volume of animal slaughtering.