8 Dec 2022 13:00

Russia not lifting export duties on grain

MOSCOW. Dec 8 (Interfax) - Russia will not lift export duties on grain, Agriculture Minister Dmitry Patrushev said at a meeting of the State Duma Committee on Agrarian Issues on Wednesday.

There have been calls to abandon this measure for regulating the grain market since the decision to adopt it was made, but the Agriculture Ministry's position has remained unchanged.

"We will not eliminate the duties. This is a mechanism that makes it possible to 'untie' the domestic grain price from the external one," Patrushev said.

He said the duties are dynamic and change depending on world prices. "For example, for corn, taking into account the world price, the duty is now zero. While the duty on wheat was 7,500 rubles per tonne at the beginning of the year, now it is slightly more than 2,000 rubles," Patrushev said.

Russia introduced the grain damper mechanism on June 2, 2021. It provides for floating export duties on wheat, corn and barley, with the generated revenue going back to agricultural producers in the form of subsidies. The size of the duties is calculated weekly using price indicators based on the prices of export contracts registered on the Moscow Exchange.

The duties were calculated in dollars until July 6 and subsequently in rubles. The base price for calculating the export duty is 15,000 rubles per tonne for wheat and 13,875 rubles per tonne for barley and corn. The duty amounts to 70% of the difference between a base price and indicative price.

Russia had a record grain harvest of more than 150 million tonnes this year, including over 100 million tonnes of wheat. Data in clean weight have not been published yet, but in bunker weight the harvest stood at 157.7 million tonnes as of December 7. Russia's export potential this season (July 2022-June 2023) is estimated at more than 60 million tonnes, but market exports believe actual exports will not reach this level because of various restrictions due to geopolitical developments.