Tuesday, November 29, 2022

Russia Could Instate Protective Duties on Wheat

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MOSCOW (Reuters) — Russia’s government, which has said Russia should export no more than 23-25 million tons of grain during this crop year, could consider imposing protective duties from April, when exports are likely to hit that level, traders and analysts said.

Russia’s government in June announced it would regulate exports via duties in the future as it prepared to lift a near-total ban on grain exports imposed in the wake of a catastrophic drought in August 2010.

A spokesman for Prime Minister Vladimir Putin said he was unaware of any plans to discuss a new duty.

Russian exports reached 19.5 million tons by mid-January, a record at that juncture, after barely slackening in December, when Russia loaded 3 million tons for export.

“We are expecting 1.5 million tonnes for January,” Andrei Sizov Jr., managing director of the SovEcon consultancy, said by telephone on Wednesday. “At these rates we’ll hit the declared levels in a matter of two or three months.”

SovEcon estimates Russia has an exportable surplus for the year of 25 million tons, he added.

Traders said a government ruling on a possible protective duty, if it materialised, would likely be announced a month to a month and a half before the charge was levied.

“They could say in advance, as much as a month and a half,” said a trader who exports Russian grain. “It could happen fairly soon.”

Prime Minister Vladimir Putin in October warned traders against signing “excessive” contracts, saying no more than 24-25 million tonnes of grain would be allowed to leave the country.


His deputy for agriculture, Viktor Zubkov, named a lower figure of 23-24 million tons.

Russia’s government was surprised by the rush to export when it lifted the ban, which had left elevators in Russia’s key southern export regions full to bursting.

That excess has been decimated and traders say availability is now slim in Russia’s exporting south, where prices are rising rapidly, pricing Russian supply above French offers in tenders held by Egypt’s General Authority for Supply Commodities.

A combination of low stock in the Russia’s south, logistical difficulties in shipping abundant grain stocks held inland and uncertainty over duties has made traders cautious about offering grain for April export, they said.

“There will still be offers for Russian wheat into GASC and it will remain competitive because it has a freight advantage,” a European dealer said.

“But we’re now seeing that the spread between Russia, France and America has diminished significantly and American wheat could be the most competitive origin next tender.”

Source:  Reuters

Posted by Haylie Shipp

 

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