MOSCOW (Dow Jones)--Russia will extend its ban on grain exports until after next year's harvest has been collected, Prime Minister Vladimir Putin said Thursday in an announcement that caught many in the industry off guard.

"It is necessary to note that we will be able to end the export ban only after next year's harvest is gathered and the picture regarding grain balances becomes clearer," Putin said.

In a bid to reign in surging grain prices after Russia's worst drought in decades destroyed more than a quarter of its harvest, the country last month announced an export ban that was to extend until at least Dec. 31.

Putin's comments--which see the grain ban extending to November 2011, when next year's harvest will be gathered--are a departure from the government's previous statements, which said the length of the ban would depend on the size of this fall's crop.

Putin said the decision was taken to add "predictability" to the market and prevent "unneeded nervousness" among grain producers and sellers, who he said were stockpiling grain in anticipation of the Dec. 31 end of the ban, instead of selling it in the domestic market.

"Our producers and sellers should work calmly, and orient themselves on the internal market," he said.

The announcement came as a shock to some local market watchers, with many initially believing that Putin had mispoken.

"I don't completely understand. I'm in complete confusion," said Konstantin Mesyatsev, a grain expert with the agro.ru website. "This must be some kind of misunderstanding. There is currently no reason to announce a 15-month grain ban."

Some Russian grain exporters, however, didn't seem taken by surprise.

"This isn't surprising at all. It was obvious to many of us that the current grain ban was too short," said an executive at a major Russian grain exporter.

Russia expects to harvest between 60 million and 65 million metric tons of grain this year, down from initial forecasts of 97 million.

(AG)