December 29, 2014

Russia to impose duty on wheat exports

After imposing informal grain export controls and limiting railway loadings last week, Russia said it will impose a duty on wheat exports from February 1 to June 30. This measure is the latest effort by the government to cool domestic prices.

According to the government, the wheat export duty will be equivalent to 15% of the customs price plus 7.5 euros (US$9.137) and would not be less than 35 euros ($43) per tonne.

Arkady Zlochevsky, head of the influential farm lobby group Grain Union, told Interfax news agency that the duty on wheat is expected to help lower domestic wheat prices by 15% as the government grapples with the ruble's fall, a Reuters report said.

Zlochevsky said exports in January is expected to be small due to informal export curbs.

"One of the key unknowns is whether the government will keep artificial administrative barriers or lift them starting from February 1," said Dmitry Rylko, head of IKAR consultancy.