May 24, 2017 / 3:59 PM / 2 months ago

UPDATE 2-Kremlin says in talks with Turkey after new curbs on Russian wheat

3 Min Read

(Adds Turkish reaction)

MOSCOW/HAMBURG, May 24 (Reuters) - Russia is negotiating with Turkey in an effort to resolve a stop-start agriculture trade dispute between the countries, the Kremlin said on Wednesday, although Ankara disputed it had put curbs on imports of Russian wheat.

As the largest buyer of Russian wheat behind Egypt, any move by Turkey to restrict imports of the grain could put a significant dent in Moscow's 2017/18 marketing year that starts on July 1. Russia is one of the world's largest wheat exporters.

An analyst and traders told Reuters that Turkey has introduced new curbs on Russian wheat, limiting purchases to 20-25 percent of all import licences issued for the commodity.

"Indeed, limits (on Russian wheat) are in place," Kremlin spokesman Dmitry Peskov said.

However, Turkey's economy ministry said it was not true that restrictions had been put in place.

"Media reports that Turkey has introduced limitations on the import of agricultural goods from Russia do not reflect the truth, and Turkey remains committed to the agreements signed," it said in a statement.

Traders said the curbs were a reaction to Russia's earlier ban on imports of Turkish tomatoes. Ankara imposed prohibitively high import tariffs on Russian wheat from mid-March but resumed purchases after a meeting of the countries' presidents on May 3.

Moscow has said that restrictions on tomato imports will remain to protect Russian producers.

"Some restrictions remain in place from the Russian side due to known reasons, which were explained in great detail to Turkey's President in Sochi," Peskov said.

"Contacts and negotiations with the Turkish side are being conducted."

Andrey Sizov Jr, managing director of the SovEcon agriculture consultancy, said the latest limits on Russian wheat were imposed a couple of days ago, citing traders.

"Some of them say that they are not able to get licences, others say that there is an informal limit on Russian wheat -- 20-25 percent of total imports," Sizov added.

One Turkish wheat importer based in Russia said that information about the 20-25 percent limit on wheat imports came a day or two before Russian Prime Minister Dmitry Medvedev's visit to Turkey on Monday, during which he said that restrictions on Turkish tomatoes were still in place.

A German trader said the new restrictions were imposed on Russian wheat and also maize (corn).

"If you apply to import a certain tonnage of Russian corn and wheat with an import licence, only 20 percent of your approved quantity is allowed for import duty free," he said.

"I suspect this is part of a wider trade dispute because Russia has not removed restrictions on Turkish products after the recent agreement between Turkey and Russia."

Russian sunflower oil supplies to Turkey have also been affected by the latest limits, Russia's Oil Union said. (Reporting by Dmitry Solovyov, Polina Devitt and Michael Hogan; Additional reporting by Nevzat Devranoglu and Ece Toksabay in Ankara; Editing by David Goodman and Elaine Hardcastle)

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