On July 3, Russia to Further Reduce Export Duty on Wheat


Published Date: July 03, 2024
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Their reduction has occurred for the third weekend in a row. On June 19, they declined by 3.2 percent, or 91.2 rubles, from the previous week, reaching 2,754.1. On June 26, the tariff on primary grain was reduced by 261.3 rubles per ton, totaling 2,492.8. We should also keep in mind that the rate of meslin (a cross between this crop and rye) is shifting in the opposite direction as wheat. Corn and barley rates will stay at zero for the 12th and 11th weeks, respectively. This duty rate will apply until July 9, inclusive. Looking to Wheat Importer ?

Russian Grain Export Duties

The taxes on Russian grain are currently in place since June 2, 2021, and account for 70% of the difference among their base and suggested prices. The first two are the market's minimal allowable changes in export rates. They consider a variety of factors, including grain sowing costs, predicted harvests, agricultural prices around the world, and exchange rates. These are determined independently by the Ministry of Agriculture. Previously, they were 15,000 rubles for wheat and 13,875 for corn and barley. Since the beginning of the month, they have recently increased to 17 ,000 for the first and 15,875 for the remaining two, and they will be increased to 18 ,000 and 16,875 thousand, respectively, starting tomorrow.

Deputy PM Dmitry Patrushev: New Grain Duty Rates to Benefit Producers

Former ministry chief and current Deputy Prime Minister Dmitry Patrushev stated that the rise will allow grain farmers to keep more of their own earnings and withdraw less into the federal budget. Base pricing has always been computed in Russian currency. On July 6, taxes began to be decided. The government took this decision to provide transparency in calculations and independence from the American currencies. The second set of prices is the calculated average of the cost of contracts for export in the week preceding the modification of duty rates.

Moscow Exchange Calculates New Grain Duty Rates

The Moscow Exchange calculates it and sends it to market participants, who subsequently send it to the Ministry. All major commodities will see price increases next Wednesday: wheat and meslin from 235.8 to 236.3 dollars, corn from 177.8 to 180.6, and barley from 165 to 173.7. Unlike base prices, their calculation cannot yet be converted into rubles because the export contacts linked with them are computed in US dollars.

Conclusion 

To summarise, recent modifications to Russian grain taxes on exports reflect a purposeful effort to combine domestic agriculture support with market forces. The Russian government seeks to provide more accountability and consistency for grain farmers by raising base prices and modifying tariffs irrespective of the American currency. The ongoing modifications, as regulated by the Moscow Exchange, are going to keep affecting the market and help the agriculture industry through a measured approach to tariffs and export contracts.

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