In a recent decision reported by Interfax, the Russian government has approved the extension of export duties on sunflowers and soybeans until August 2026. This move, announced by the Russian economy ministry, continues the current export duties, with sunflowers taxed at 50% or at least 32,000 roubles per metric ton, and soybeans at 20% or no less than $100 per metric ton. Additionally, the Russian commission on customs tariffs has extended the "floating" duty rates on sunflower oil and sunflower meal.

New Rapeseed Export Duty Imposed

Effective from September 1, 2024, until August 31, 2026, Russia will also lift the ban on rapeseed exports and impose a new duty of 30%, with a minimum of 165 euros per metric ton. This policy change is part of Russia’s broader strategy to regulate its agricultural commodity exports and potentially influence global market dynamics.

Price Volatility Expected

The extension of high export duties on sunflowers and soybeans is anticipated to cause a surge in global prices for these commodities. Importers may face increased costs, which could lead to price adjustments and heightened market volatility. As these commodities become more expensive, global markets might experience fluctuating prices, impacting various sectors dependent on these key ingredients.

Potential Supply Chain Disruptions

The extension of export duties and the introduction of new duties on rapeseed might likely disrupt existing supply chains. Countries that rely significantly on Russian exports of sunflower, soybeans, and rapeseed may encounter shortages or delays. 

Shifts in Global Trade Flows

In response to the increased costs associated with Russian exports, importers may explore alternative sources for sunflowers, soybeans, and other affected commodities. Major producers such as Ukraine, Brazil, and the United States could see a rise in demand as global importers adjust their supply chains. 

Impact on Global Prices

The elevated cost of exporting sunflowers, soybeans, and rapeseed from Russia is expected to drive up global prices for these commodities. This price increase may affect food production and supply across various industries. Countries that are heavily reliant on these imports for their food and feed industries could face higher costs, which might influence their domestic markets and overall economic stability.

Conclusion

The extension of export duties by Russia on key agricultural commodities, along with the introduction of new duties, is set to impact the global market significantly. While this move may stabilise Russia’s domestic market and align with its economic policies, it will likely cause price volatility, disrupt supply chains, and alter global trade flows. Importers and industries dependent on these commodities should brace for potential shifts in market dynamics and consider strategies to mitigate the effects of these changes on their operations.

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