Russia: Russia introduces export duty on wheat as of February 1

Export duty for Russian wheat will total 15% of its customs value plus 7.5 euro but not less than 35 euro per ton as of February 1, 2015, says a resolution that Prime Minister Dmitry Medvedev signed on December 25.

“The imposition of this export duty is called upon to stabilize the situation on the domestic market of grain,” the governmental press service said in a report.

The export fees apply to the wheat taken outside the territory of the CIS Customs Union countries. The cabinet of ministers plans to publish the full text of the resolution at its official website shortly.

The government has drafted measures towards limiting the exports of Russian grain with the aid of export fees in a bid to prevent a sharp growth of domestic prices for grain, which began to climb after a sharp weakening of the ruble versus major foreign currencies, which prompted the exporters to launch amassed exports.

The growth of grain exports as of July 2014 outpaces the figures for the same period a year ago by 30%, the Ministry of Agriculture said. Over the past seven days alone, the price of wheat went up by 5%.

The Speaker of the upper house of Russian parliament, Valentina Matviyenko said earlier grain prices in this country rose by 80% on the whole over the past five months.

Imposition of export duties is the first restrictive step on grain exports since 2010 when the government introduced a full ban on grain exports because of a major drought, which had hit the major agricultural areas in the parts of the country to the west of the Ural Mountains. The move triggered a hike of prices on the international markets then.

Dmitry Rylko, the Director General of the Institute for the Studies of Agrarian Markets. Russian companies have exported 20.6 million tons of grain since July 1 this year, or since the date that is traditionally regarded as the start of the agricultural season. The exporters revenues totaled $ 4.5 billion.

The traders planned to supply another 11 million tons of grain until June 30, 2015, and to get $ 2.5 billion for it.

Exporting companies expected restrictions back in the summer months, saying they might come in the form of an embargo. They would cite a force majeure situation at talks with customers then, while the export fees do not give them an opportunity of this kind.

26 December, 2014