Russia Plans to Raise Wheat Export Tax From March 1, Global Prices Rise

Image: Collected
* Russian government has but to sign off proposal

* Russia could keep taxing wheat exports found in the 2021/22 season

* Plans a formula-based taxes for the brand new season

By Polina Devitt and Darya Korsunskaya

MOSCOW, Jan 15 (Reuters) - Russia, among the world's major wheat exporters, ideas to impose a higher export tax on wheat from March 1, its overall economy minister said on Fri, in another push to curb a growth in domestic food prices triggered simply by the COVID-19 crisis.

Wheat rates in Chicago and Paris jumped following the proposal, that your Russian government features yet to indication, on expectations the bigger tax could make purchasers prefer wheat from different countries.

Traders say Russia's maneuver will drive up the cost of wheat in importing countries when the pandemic has recently reduced incomes, making the world's poorest especially susceptible to food poverty.

Wheat futures on the Chicago Board of Trade rose to a peak of $6.93 a bushel on Friday, the best since May 2014.

Russia wants to raise its wheat export tax to 50 euros ($60.68) per tonne from March 1 to June 30, from the 25 euro-per-tonne tax place for Feb. 15 to March 1, economy minister Maxim Reshetnikov explained, citing tips by a tariff subcommittee.

"There is a have to prevent even more pressure on domestic rates," the minister said in a affirmation. The agriculture and additional ministries said they supported the idea.

Russia will continue taxing wheat exports found in the marketing season that begins on July 1 and can prepare a formula for that, rather than the existing fixed tariff, the minister said.

WINNERS AND LOSERS

The proposal is a toughening of measures approved by the federal government in December after President Vladimir Putin criticised domestic food price growth resulting from the pandemic.

It had been not immediately clear how much wheat the bigger tax would take out from Russia's exports in today's 2020/21 period, which started on July 1, 2020.

Sovecon consultancy said that, despite higher taxes, farmers can also be more ready to sell this period because of the uncertainty surrounding another formula-based tax next time of year.

The U.S. Department of Agriculture explained this week it predicted Russia's 2020/21 wheat exports to be 39 million tonnes. About 24 million tonnes have been exported.

"The debate now could be who gets control Russia's export business. Rates are shooting up today in Europe and Chicago hence markets expect more sales from both of these origins," a German investor said.

The European Union, even so, has reduced supplies after a tiny crop in 2020 and heavy exports over recent months, while Ukraine has already shipped abroad a lot more than 70% of the season's quota, traders said.

Russia's major importers of wheat, such as Egypt, Bangladesh and Turkey, happen to be among those facing higher pay for costs.

"The importers are set to be the losers because they will probably not receive the low cost Russian grains that they had been expecting in returning months," one of the dealers said. The investors asked never to be named because they're not authorised to speak to the press.

Russia also plans to set a barley and corn export taxes at 10 euros per tonne and 25 euros per tonne, respectively, starting from March 15, the economy minister said. The country exports barley and corn generally to the center East.
Source: https://www.agriculture.com

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