Russia decreases wheat export duty
WASHINGTON, D.C., U.S. — Russia temporarily decreased its wheat export duty, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said in an Oct. 6 report. The temporary export duty began on Sept. 23 and will last until July 1, 2018.
As of Aug. 30, 62.03 million tonnes of wheat has been harvested, up 32% from the same period of last year.
Total grain exports for Russia for market year 2016-17 is forecast at 37 million tonnes. The total grain exports increase is largely due to an increase in the forecast for wheat exports to 28 million tonnes from 24.5 million tonnes, the FAS said. On Aug. 1, Russian traders and Russia’s Ministry of Agriculture appealed to the Russian government with a request to lift the export duty on wheat. On Sept. 2, Russian Prime Minister Dmitry Medvedev said the government would indeed waive the export duty on wheat for two years, noting such a move should provide an additional incentive for growth in the Russian domestic grain market.
According to the report, the temporary decrease of the export duty on wheat to zero may stimulate exports of Russia’s grain and give traders more stimuli to conclude future contracts on wheat. However, the Russian Ministry of Agriculture reports that the export duty mechanism will return in case of a force-major situation, such as the sharp devaluation of the Russian ruble and/or a low wheat crop in the future. Wheat producers and traders consider this to be a factor that may increase risk in the future.