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30 Mar, 2022 10:22

Russian grain union wants to switch export payments to rubles

Western sanctions prompt agriculture exporters to find solutions to minimize risks
Russian grain union wants to switch export payments to rubles

The Russian Union of Grain Exporters (Rusgrain) has turned to the Bank of Russia to get the necessary tools to start selling domestic produce for rubles. The measure was discussed at the regulator’s meeting with the alliance, according to the list of initiatives obtained by business daily Kommersant.

Rusgrain, which accounts for more than 70% of Russian grain exports, has asked the regulator to provide ruble liquidity for foreign banks that serve the buyers of the country’s grains.

The current contracts currently permits all transactions to be made in foreign currency,  sources close to the union told the media, adding that the Ukrainian conflict that led to the fresh wave of anti-Russian sanctions has posed serious challenges to obtaining those payments.

Market participants are facing serious restrictions on logistics, insurance and payment for grain, according to the Rusgrain Chairman Eduard Zernin, who said that the union had to turn to the central bank to avoid supplies being disruped.

Since March 10, Russia has exported 28.1 million tons of grain, including 23 million tons of wheat, which is about 30% lower compared to the same period in 2021, the Ministry of Agriculture reported.

Turkey, Egypt, Iran and Saudi Arabia are currently the main importers of Russian grain. Russia and Turkey have reportedly had success in ruble settlements. The scheme is expected to significantly facilitate trade with Iran.

On Monday, the chairman of the State Duma Vyacheslav Volodin called for switching to ruble settlements for exports in other Russian commodities, such as fertilisers, seed oil, crude, coal, metals, wood and grains.

The initiative follows Moscow's March 31 deadline for “hostile” countries to begin payments for Russian natural gas imports in rubles.

For more stories on economy & finance visit RT's business section

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