Russian govt imposing grain export duties - Dvorkovich
MOSCOW. Dec 22 (Interfax) - The Russian government is imposing grain export duties, Deputy Russian Prime Minister Arkady Dvorkovich said at a meeting with Prime Minister Dmitry Medvedev and other deputy prime ministers.
"We'll draft a resolution on grain export duties, this will be done in 24 hours," he said.
Prime Minister Medvedev said at the meeting that Russia had a splendid harvest this year, and that exports had risen considerably, so the country needed a reserve. Therefore he recommended that proposals to impose administrative restrictions on grain exports be developed.
"This has to be done properly, in coordination with the leading market participants; temporarily, but flexibly enough to enable us to regulate the grain market situation and to provide the people with bread and baked products," he said.
Dvorkovich, for his part, said that the export potential that would ensure a stable market after a harvest of 104 million tonnes was an estimated 28 million tonnes, and that 21 million tonnes of that had already been shipped abroad.
He said measures had been taken last week to limit grain exports but these mostly concerned the strict observance of the law, for example stepping up control of grains shipments by truck and rail, and the issuance of phytosanitary certificates.
Dvorkovich said instructions had been given last week to firm up legislation in this area. "This really has been breached, above all when shipping grain by truck," he said. "There have been frequent cases of overloading, and instructions were given told Interfax stop such vehicles and send them back without exception. Grain shouldn't be exported this way," he said.
The procedure for issuing phytosanitary certificates and trans-shipping grain via ports was tightened last week. "Controls have been beefed up on the part of [transport watchdog] Rostransnadzor], we have put an end to so-called grey schemes for supplying grain, but this isn't enough to stabilize the situation and we'll be drafting proposals to impose export duty on grain," Dvorkovich said.
The grain exporters themselves are asking the government to leave it until at least March 1 before imposing the export duty.
The National Association of Exporters of Agricultural Products said in a letter to Dvorkovich, seen by Interfax, that the duty ought to be introduced after a more appropriate period "to allow all market participants to prepare for work in the new conditions."
The association said the government's signal to farmers regarding the introduction of an export duty, and the fact that grain procurement for export had already come to a stop, "would start to influence the domestic grain market immediately and enable Russia to preserve a sufficient unsold export grain balance."
The exporters also say that the government's "intervention in the grain market's self-regulation was forced and driven by the need to balance the internal market and lower wholesale grain prices."
At the same time they say that in the economic circumstances that have emerged, "the optimal regulatory measure" is to ban grain exports. "This stays entirely within WTO principles and regulations. The market would react immediately, and goals would be achieved very soon."
A representative of a major grain trading company also said a grain export ban would be preferable. "In this situation a ban would be preferable, not duties," he told Interfax. "But if an export ban is not an issue, the duty ought to be prohibitive" and exceed $100 a tonne, he said. Only that way can the restriction's goal be achieved, he said.
The trader also said exporters needed to be given the opportunity to fulfill contracts that have already been signed.