23 May 2022 11:09

Russia pushes for all EAEU countries to restrict grain exports - paper

MOSCOW. May 23 (Interfax) - Although it anticipates a record wheat harvest this year, Russia is concerned about re-exports of its grain from fellow Eurasian Economic Union (EAEU) members and wants all of them to impose quotas and duties on grain exports.

Russia insisted at a meeting of the Eurasian Economic Commission (EEC) on May 20 that all EAEU members impose quotas and duties on grain exports to third countries, national daily Kommersant reported on Monday, citing sources.

Russia's Agriculture Ministry believes this is necessary in order to prevent re-exports of Russian grain through the EAEU in circumvention of Russian restrictions, the sources said. The Agriculture Ministry did not respond to questions, the paper said.

This spring, amid an increase in wheat purchases in Siberia by Kazakhstan, Russia prohibited grain exports to EAEU countries until June 30. This upset Kazakhstan, which accused Russia of discrimination and also imposed quotas on wheat and flour exports in response.

At the EEC meeting, Russian officials said measures already taken are insufficient, as Kazakhstan does not have quotas on barley and corn exports or export duties, the paper's sources said. As a result, there is a substantial difference between domestic prices in the two countries.

Siberian wheat is currently trading at an average of 18,000 rubles per tonne with VAT, which is about 5,000 rubles less than Kazakh wheat, one source said.

EAEU members planned to introduce a common approach to export restrictions on wheat, barley, corn, sunflower seeds and a number of other products back in August 2021, but the proposal was never implemented. Belarus imposed a complete ban on wheat exports. Armenia and Kyrgyzstan are preparing decisions on duties and quotas, one of the paper's sources said.

Kazakhstan is opposed to duties, as they could prevent the country's farmers from fulfilling international obligations, the source said. The relevant ministries of Belarus, Kazakhstan, Kyrgyzstan and Armenia did not respond to questions.

The director of the Institute for Agricultural Market Studies (IKAR), Dmitry Rylko said regulating grain exports across the EAEU is the right thing to do in "abstract" terms, but there could be problems with implementation due to opposition from certain countries. Russian Grain Union president Arkady Zlochevsky said only Kazakhstan is opposed.

One of the paper's sources said Kazakhstan's likely refusal to introduce identical measures to Russia will probably push the Russian Agriculture Ministry to extend the temporary ban on grain exports to the EAEU.

Russia introduced floating export duties on wheat, barley and corn on June 2, 2021. In the period from February 15 to June 30, grain exports are also limited by a quota of 11 million tonnes, including 8 million tonnes of wheat.

The EEC told Interfax earlier that the trade restrictions that EAEU countries have been imposing recently are a forced measure and, despite the unfavourable economic situation the EEC is continuing to work on the unhindered operation of the internal market of the union.

"One of the most important challenges in these difficult conditions is to seek consensus and achieve an optimal balance between objectives within the EAEU and the national sovereignty of union countries to solve issues of economic, food and humanitarian security both on the national and integrational planes," the EEC said.