September 13, 2012 / 10:32 AM / 5 years ago

Traders spreading Russian grain ban rumours: Deputy PM

* Dvorkovich repeats "Russia will not ban exports"

* Speculation spreading after drought

* Crop likely to fall more than a quarter from last year

MOSCOW, Sept 13 (Reuters) - Russian Deputy Prime Minister Arkady Dvorkovich accused speculators of spreading false rumours that the country would ban grain exports this year and repeated his promise that Moscow would not impose restrictions.

Crops across Russia have been parched by drought since early spring, recalling the catastrophic drought of 2010 which prompted President Vladimir Putin, then serving as prime minister, to ban exports in a shock to world markets.

Russia's grain crop is likely to fall by more than a quarter from last year's 94 million tonne harvest, and exports could fall from last year's record 28 million tonnes by 50 percent or more.

Rumours that Russia could restrict exports have persisted in trade circles despite increasingly insistent assertions by the deputy prime minister that Russia will avoid them.

"I have a feeling sometimes that the news gets overplayed to create the impression that the problem is bigger than it is and get people to think that we could limit exports," Dvorkovich said in an interview with Vedomosti daily, published on Thursday.

"This immediately affects prices on the international market. I think that imposing export restrictions is unadvisable because they give the opposite effect. Prices will rise and the situation will be worse than if we don't do it."

He did not blame anyone in particular for spreading the rumours but said "traders, including those who work on world markets" were stoking the speculation.

"When I watch television, I see that the drought is being shown, but for some reason they don't talk about the fact that the total grain harvest will be enough to meet all needs," said Dvorkovich.

The government was looking at programmes to increase irrigation but they were small compared to the needs of the entire farm industry.

"There was a soil improvement programme in the Soviet times but it essentially perished in 1998 when people dug up the pipes to sell them for scrap to survive," he said.

"The main issue is whether we can bring private capital into this area. We are talking about water and companies which work with water resources, for example (state hydropower company) RusHydro. If there are profitable projects, RusHydro will go in." (Writing by Melissa Akin; Editing by Lidia Kelly and Andrew Heavens)

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