January 27, 2012

 

Russia may impose grain tax beginning April

 

 

The government of Russia, which has said that the country should export no more than 23-25 million tonnes of grain during this crop year, may consider placing protective duties from April, when exports are likely to hit that level.

 

Russia's government in June announced it would regulate exports via duties in the future as it prepared to lift a near-total ban on grain exports imposed in the wake of a catastrophic drought in the summer of 2010.

 

A spokesman for Prime Minister Vladimir Putin said he was unaware of any plans to discuss a new duty.

 

But European wheat futures hit a new four-month high on Wednesday (Jan 24), spurred by talk that Russia could impose new curbs a year and a half after shocking world markets with a unilateral ban on export to preserve domestic supplies after the drought.

 

At 1538 GMT, European wheat was up 0.85% at 207.50 euros.

 

Prices for export grain in Russia are already high due to regional stock imbalances and Russian wheat has been priced less attractively at recent international tenders than earlier in the marketing season.

 

Russian exports reached 19.5 million tonnes by mid-January, a record at that juncture, after barely slackening in December, when Russia loaded 3 million tonnes for export.

 

"We are expecting 1.5 million tonnes for January," Andrei Sizov Jr., managing director of the SovEcon consultancy, said by telephone on Wednesday. "At these rates we'll hit the declared levels in a matter of two or three months."

 

SovEcon estimated Russia had an exportable surplus for the year of 25 million tonnes, he added.

 

Russia's harvest beat forecasts this year, coming in at nearly 94 million tonnes and creating a picture of plenty, with the exportable surplus officially pegged at 24 million tonnes.

 

Overall stock levels, excluding those at small farms, stood at 42.5 million tonnes, up 13%, reflecting a resurgence in agricultural production, State Statistics Service (Rosstat) data obtained by Reuters showed on Wednesday.

 

But in the Southern Federal District, a main producing and exporting region which was comparatively unhurt by the drought and ended the 2010/2011 crop year with its elevators overflowing, stocks were down 17% at 7.6 million tonnes.

 

Russia's government was surprised by the rush to export when it lifted the ban in July. Prime Minister Vladimir Putin in October warned traders against signing "excessive" contracts, saying no more than 24-25 million tonnes of grain would be allowed to leave the country.

 

His deputy for agriculture, Viktor Zubkov, named a lower figure of 23-24 million tonnes.

 

Traders, mindful of those warnings and eager for clarity, said a government ruling on a possible protective duty, if it materialised, would likely be announced a month to a month and a half before the charge was levied.

 

"They could say in advance, as much as a month and a half," said a trader who exports Russian grain. "It could happen fairly soon."