Russia: Deputy Prime Minister hopes wheat export tax will be temporary

Russian Deputy Prime Minister Arkady Dvorkovich said on June 19 he hoped a new Russian wheat export tax will be a short-term anti-crisis measure, Reuters reported.

The new tariff, to be launched from July 1, is intended to stop exports surging if the rouble drops steeply, the Russian government said when it signed the order in May.

Russia, a leading wheat exporter to North Africa and the Middle East, has battled with a volatile local currency since mid-2014, due to weak oil prices and Western sanctions over Moscow's role in the Ukraine crisis.

"(The wheat duty) is an anti-crisis measure and temporary. I hope it will be short term," Dvorkovich said at the St Petersburg International Economic Forum.

"In this difficult period, when the possible consequences of exchange rate fluctuations are still not clear, we have to agree on this measure to prevent a sharp rise in prices on the domestic grain market," he said.

The rouble weakened on June 19, correcting downwards after two days of strong performance driven by demand for roubles to pay local taxes.

Uncertainty over the currency's performance and how the floating tax formula will be calculated is slowing grain trade activity, traders say, and could threaten profits on advance contracts for the new crop if the rouble weakens in the coming months.

19 June, 2015