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Volga Baikal AGRO NEWS Update on the Introduction of Export Duties in Russia !!!
Ministry of Economic Development has clarified the parameters for calculating export duties on grain.
Permanent “floating” duty will be introduced on wheat, corn and barley.
From the new season in Russia, on a long-term basis, a “floating” export duty on wheat, corn and barley will begin to operate, said the head of the Ministry of Economic Development Maxim Reshetnikov during a briefing. Prices on world markets were actively growing, and since Russia is the world’s largest exporter of wheat, this dynamics spread to the Russian market, so the measures taken earlier to reduce domestic prices – the introduction of export duties and quotas on grain exports – were not enough, Reshetnikov explained.
A new systemic measure for regulating the grain market will be a damper mechanism, which consists of two directions: establishing export duties on grain on a long-term basis and returning the proceeds from the collection of duties to agriculture. Until the end of the season, previously approved rates will be valid. From 15 February – 25 euros / ton for the export of wheat, from 1 March this duty will increase to 50 euros / ton. From March 15, duties will be added on corn (25 euros / ton) and barley (10 euros / ton). In parallel, from February 15, a quota of 17.5 million tons for grain export will begin to operate.
From June, it is planned to launch a floating export duty mechanism. “It will work for a long-term period, and it assumes that the size of the duty will be determined depending on the export price, which will be added up,” said Reshetnikov (quote from the government website).
At a world price of up to $ 200 per ton of wheat, the duty will not be charged. For prices over $ 200 / t, a duty of 70% of the difference between the base price and $ 200 will be charged. According to Reshetnikov, head of government Mikhail Mishustin has already signed a decree related to the determination of the base price. By 11 pm on February 4, the document had not yet been published. The head of the Ministry of Economic Development said that the base price and the amount of duties will be calculated based on the prices of export contracts, which from April 1 must be registered on the stock exchange. For the first time, the duty under the new rules is planned to be established on June 2. The same floating mechanism is being introduced for barley and corn, Reshetnikov added.
“Both grain producers and exporters receive a clear economic model that will allow them to calculate their economy, participate in international tenders and, most importantly, give certainty for the long term and, accordingly, taking this into account, the opportunity to plan their policies in the markets” , – the head of the Ministry of Economic Development is sure. The department expects that these measures will be sufficient to curb the rise in prices for wheat and for all products where it is used in the domestic market.
According to the instruction of President Vladimir Putin, all funds that will be received from the collection of export duties should return to agriculture in the form of subsidies to plant breeders. It is assumed that the money will be directed to the regions, depending on the volume of grain production, and the regions will bring it to agricultural producers, Reshetnikov said. According to him, “in fact, it will be money from foreign markets,” which will return “in the form of additional investments in our agriculture.” On the other hand, the duties will prevent the transfer of price fluctuations on the external market to our internal markets, he stressed.
