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IKAR in Mass Media

Russia's wheat exports set to rise after export tax drops to zero

07 июля 2025 года

MOSCOW, July 7 (Reuters) - Russian wheat exports are expected to get a boost following a fall in an export tax to zero, reflecting the rouble's strength as well as low global prices, analysts and traders told Reuters on Monday.

Russia, the world’s largest wheat exporter, is estimated by analysts to have supplied global markets with about 20% less wheat in the marketing season that ended on July 30 compared with the previous season.

Bad weather last year is seen as the main reason for the lower crop and exports, but farmers have also complained about the export tax, which they said makes growing and exporting wheat unprofitable.

They have urged the government to abolish or reduce the duty, saying that only a small part of the tax revenue is returned to the sector.

The tax was introduced in 2021 to protect the domestic market from price spikes. It fell to zero for the week beginning July 9, the first time it has been at that level since its introduction.

Dmitry Krasnov, managing director of the agriculture section at Reksoft Consulting, told Reuters that the tax's initial role was to act as a "price buffer" but it has become a source of revenue for the budget.

The Russian budget received 141 billion roubles from the export tax in 2024, based on official government data.

The Agriculture Ministry did not immediately respond to a request for comment.

RESTORE THE BALANCE

Krasnov said although the funds are ultimately used to support agriculture, the tax has created imbalances throughout the entire wheat supply chain from producers to exporters.

"In this regard, the removal of the duty is an attempt to stimulate export deliveries and restore the balance between supply and demand prices," Krasnov said.

The tax is calculated as 70% of the difference between an indicative price, derived from weekly export contract data in dollars, and a base price set by the Agriculture Ministry.

The government last set the base price at 18,000 roubles ($228.73) per ton in June 2024.

The indicative price was set at $228.7 per ton of wheat as of July 9, the lowest so far this year. As a result, the duty was set at zero.

The ministry has made no change to the tax calculation formula for the duty, which is reviewed on a weekly basis.

Dmitry Rylko, the head of IKAR consultancy, said zero tax level also reflects the rouble's 40% rally against the U.S. dollar this year, which ate into exporters' profits.

"The zero duty indicates an extremely unfavourable combination of the world price and the rouble exchange rate," Rylko said. Wheat futures fell by 2% on Monday on expectations of an abundant global harvest.

MAKE FARMERS HAPPY

"Russia’s harvest looks good, so it appears that the Russian government has decided to allow more to be exported," said a German trader who declined to be identified. He stressed that the move will "make farmers happy."

Andrei Sizov from Sovecon consultancy predicted that the tax may stay at zero for some time as global prices are set to fall.

Russia is set for a 4% increase in its grain harvest to 135 million tons this year.

The tax has helped to keep the lid on white bread prices in Russia, which have risen by 6% this year, above the overall inflation rate of about 4%, but less than price spikes for many other staples, based on official statistics.

“The cut will certainly help to generate more Russian wheat exports. Russian exports have been artificially held back by the government to keep domestic prices low, especially for bread," another German trader said.

Source: Reuters  |  #grain   |  Comments: 0   Views: 1

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