Russia to maintain grain export taxes while global food demand high -Deputy PM
Russia’s new formula-based grain export taxes will remain in place as long as there is increased global demand for food, Deputy Prime Minister Victoria Abramchenko told Reuters.
As one of the world’s largest wheat exporters, Russia launched the taxes on Wednesday as part of measures Moscow hopes will help to stabilise domestic food inflation.
“Lower supply in the global food market will result in large consumers having to summon food from all over the world. We must be ready for this and protect our domestic market … We have to maintain a certain amount of grain in the country,” she said.
The government plans to update the taxes each week which, traders have said, will complicate forward sales to major customers such as Egypt.
Russia competes with the European Union for the rank of the world’s largest wheat exporter. Egypt, Turkey and Bangladesh are the largest buyers of its wheat. GRA/RU
World food prices increased for a 11th consecutive month in April, hitting their highest level since May 2014, the United Nations food agency has said.
“As long as there are risks for the global food market, a rush in demand that leads to shortages in the domestic market and rising prices, the state decision to impose the duty will be maintained,” Abramchenko added.
The formula employed for Russia’s grain export taxes will help the government to change their size in case of a sharp growth in global prices, deputy economy minister, Vladimir Ilyichev said on Wednesday.
The government is playing the long game and sees the taxes as a market-based instruments to smooth out fluctuations, another deputy economy minister, Polina Kryuchkova told Reuters.
Source: Reuters (Reporting by Olesya Astakhova, Katya Golubkova and Darya Korsunskaya; Writing by Polina Devitt; Editing by Jason Neely and Alexander Smith)