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IKAR in Mass Media

Russia expected to leave its grain export tax untouched

02 февраля 2016 года

MOSCOW, Jan 29 (Reuters) – Russia appears to be rejecting proposals to change its current regime of taxes on grain exports, sources said on Friday.

Concerns over the possibility of tougher limits on Russia’s wheat exports sent global prices to a one-month high earlier this week.

Then the agriculture ministry proposed removing or cutting the export tax on wheat, while imposing one on barley and corn.

Now it appears all proposals have been rejected, at least for now.

“They will not change anything,” one industry source said on Friday after a meeting with deputy prime minister Arkady Dvorkovich, who is in charge of agriculture.

Dvorkovich’s spokesperson, Aliya Samigullina, told Reuters that no decision had been made at the meeting.

A decision to reduce the tax would have been a blow for other exporters, including the European Union, the United States and Argentina, a German trader said.

“This would keep Russian competition in wheat export markets high at a time when falling oil prices have reduced purchasing power in some of the biggest Middle East grain importing countries,” he said.

Russia could yet consider a downgrade of the wheat export tax and will decide on the matter on Feb. 3, Dmitry Rylko, the head of agriculture consultancy IKAR said.

But officials are unlikely to approve this idea, three sources with knowledge of the matter said.

Russia has a floating tax on wheat exports; the formula is set at 50 percent of the customs price minus 6,500 roubles (US$85.50) per tonne but not less than 10 roubles per tonne.

Dvorkovich said earlier on Friday that he saw no need to change the existing wheat tax for now unless there were extraordinary reasons to do so.

Russia originally imposed the wheat export tax a year ago when the rouble’s fall boosted domestic grain prices.

Since then, anxiety over domestic prices has eased, said Andrey Sizov, the head of SovEcon agriculture consultancy.

The government can sell some grain from domestic stocks, if it needs to cool prices without changing export regulation, one trader said.

Source: Reuters  |  #grain   |  Comments: 0   Views: 85

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