According to RIA Novosti, a prolonged heat-wave and drought in summer 2010 cut Russia's grain production by 37 per cent and forced the government to ban wheat, barley, rye, corn and flour exports in August last year for the first time in the post-Soviet period.

"From 1 July, we will lift the ban on grain exports," Vladimir Putin said at a meeting with his first deputy, Viktor Zubkov.

The Russian authorities originally considered extending the ban until September-October when they could assess the future harvesting results.

Grain traders had opposed the ban, saying it would result in vast grain reserves accumulating in the south of the country and would make grain production less economically appealing, which could end up in lower grain production in the next harvesting season.

"The grain market is now stable," Mr Zubkov said, adding that harvesting prospects were quite optimistic.

Mr Zubkov also said that southern Russia indeed had sufficient grain reserves, which could begin to be exported already from 1 July, and added that the government could use a substantial intervention fund of grain (six million tons) together with customs and tariff mechanisms to curb any possible price hikes on the domestic market.