Russia May Revise Formula For Wheat Export Tax If Prices Rise Further
Russia, the world’s largest wheat exporter, may change a formula it uses to calculate its grain export taxes in case of major price growth in the global market, its agriculture minister Dmitry Patrushev told a government meeting on Wednesday.
Russia, which supplies wheat mainly to the Middle East and Africa, launched its formula-based duty for grain exports from June as part of measures the government hopes will help stabilise domestic inflation, which is at a 5-year high.
The agriculture ministry determines the size of the duty on a weekly basis, based on a formula which sees the tax at 70% of the difference between price indicators reported by traders per tonne of wheat and $200. The tax is at $69.9 per a tonne of wheat for Nov. 10-16.
“In the event of a significant increase of the global prices… lets say to up to $400 per tonne or more, the formula for calculating the floating export duty will be revised upwards,” Patrushev said.
Russian wheat with 12.5% protein loading from Black Sea ports for supply in the second half of November was at $326 a tonne free on board (FOB) at the end of last week.
Russia also plans to set a grain export quota for January-June 2022, including the one for wheat, to secure domestic supply, Patrushev said.
The size of the quota will be decided by the end of December based on Russia’s 2021 crop and the pace of exports since June, when the current 2021/22 marketing year started, he added.
To boost domestic meat supply, Russia will also set tax-free quotas for frozen beef and pork imports, the minister said.
The quota for beef will be 200,000 tonnes for 2022, and for pork at 100,000 tonnes for the first six months of 2022, the economy ministry said in a separate statement.
Source: Reuters (Reporting by Polina Devitt and Darya Korsunskaya; editing by Louise Heavens, Kirsten Donovan)