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Russian export tax to hit durum, hard wheat shipments most

15 июня 2015 года

Shipments of high quality wheat will be most hit by Russia's export tax, leading commentator Andrey Sizov Sr said, flagging the importance of exchange rate stability in maintaining volumes of lower grade grain.

The structure of Russia's wheat export tax - which in effect gives the government a 50% take on shipments priced above 11,000 roubles a tonne, $202 a tonne at Wednesday's exchange rate – will mean that shipments of higher-value wheat will be particularly affected, said Mr Sizov, president at SovEcon.

That will hamper "in particular durum and hard wheat" exports, as higher value grains, he told Agrimoney.com.

Durum has traded at level of 15,000-20,000 roubles per tonne, he said implying, on Agrimoney.com calculations, an export tax of 2,000-4,500 roubles per tonne, equivalent to $37-83.

Exchange rate factor

That looked a particular setback to importers such as Turkey, besides Italy which also imports from Russia besides being the European Union's top producer of durum, the type of wheat used to make pasta, Mr Sizov said.

However, he raised hopes that Russia can maintain a strong pace of lower value, lower quality wheat, which has been selling for export for less than $200 a tonne.

"We hope that the export tax will not really effect exports of fourth grade wheat," he said, speaking on the sidelines of the International Grains Council conference in London.

"The level that is exported may depend on the rouble exchange rate," he said, in that the strength of the rouble against the dollar, the currency in which grain trades are struck, will affect the level of the tax.

Central bank efforts to keep the rouble at 50-55 per $1 would be key to Russia's export fortunes.

Overall export prospects

However, assuming a stable and competitive rouble, SovEcon forecast Russian exports remaining relatively high in 2015-16, to some 20m tonnes, only "slightly below" the 22.5m tonnes shipped in the season which ends this month.

That figure is also above an estimate of 17m-18m tonnes on Tuesday by the Russian Grain Union.

SovEcon on Monday raised its forecast for Russia's grains harvest this year by 5m tonnes to 99m tonnes, including an upgrade of 3m tonnes to 57m tonnes in the wheat number, although Mr Sizov told the conference that with good conditions "maybe we could reach 100m tonnes".

Rival consultancy Ikar on Tuesday raised its estimate by 1m tonnes to 98m-105m tonnes, while the Grain Union stuck by an estimate of 95m-96m tonnes.

Ukraine prospects

Separately, Sergei Feofilov, director at Kiev-based UkrAgroConsult, told the IGC conference that Ukraine's wheat exports for 2015-16 would rise by 1.2m tonnes to 10.8m tonnes.

The estimate was based on a forecast of a "near-record-high" harvest of 22.0m tonnes, up 500,000 tonnes year on year.

The forecasts reflect ideas that while farmers have kept planted area "stable", they have switched away from some crops, such as corn, which are more expensive to grow.

Ukraine corn exports for 2015-16 were seen falling 1.5m tonnes to 17.0m tonnes, reflecting a 1.9m-tonne drop to 7.0m tonnes in production.

Source: Agrimoney.com  |  #grain   |  Comments: 0   Views: 147

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