Russian Agriculture Ministry plans to increase base price for wheat to 18,000 rubles/tonne for export duty calculation

MOSCOW. May 24 (Interfax) - Russia's Ministry of Agriculture plans to raise the base price (the so-called cut-off price) of wheat, which serves as the basis on which the export duty is calculated, to 18,000 rubles per tonne, the Union of Grain Exporters reported on Telegram, citing Director of the Ministry's Department of Regulation of Agricultural Markets, Alexander Malov.

The price is currently 17,000 rubles. It was raised from 15,000 rubles in June 2023, which had been in effect since July 2022.

Russia introduced a grain damper mechanism on June 2, 2021, which provides for floating duties on the export of wheat, corn and barley and the return of funds received from them to subsidize agricultural producers. The duty amount is calculated weekly using indicators based on the prices of export contracts registered on the MOEX. At first, duty rates were calculated in dollars. They have been determined in rubles since July 2022. The duty is 70% of the difference between the base and indicative prices.

Some time ago, the then Minister of Agriculture, and now Deputy Prime Minister, Dmitry Patrushev stated that the duty before the new season (which begins July 1, 2024) would be adjusted slightly.