Russia introduces 24-million tonne grain export quota starting Feb 15 with possible increase to 28 million tonnes

MOSCOW. Feb 15 (Interfax) - The tariff quota for Russian grain exports will enter force on February 15 and will limit the export of grain through June 30, 2024.

A Russian government decree dated December 23, 2023 dictates a quota of 24 million tonnes. It applies to the export of wheat and meslin, rye, barley and corn outside the EAEU.

By government decree (June 2023), as of 2024, the quota is divided into both primary and supplementary parts. The bulk of the quota (90%), as before, is distributed on a historical basis. In this case, for each exporter, a reduction factor is calculated equal to the quota sampling percentage in the previous period. The new mechanism also gives exporters the right to voluntarily refuse the quota or part of it. Waiver applications will be accepted from April 1 through April 20.

The supplementary quota volume will consist of three parts: 10% of the total quota volume plus the volume "freed up" due to the application of the reduction factor, as well as volumes from refusals. Exporters who have already been allocated the bulk of the quota on a historical basis will be able to apply for an additional part of it.

However, the Agriculture Ministry previously said that this year, a reduction factor would not be applied when distributing the primary part of the quota; this mechanism will begin to operate in 2025. Therefore, the size of the supplementary part of the tariff quota this year will be made up of two parts: 10% of its total volume plus the volume formed from voluntary waivers of the allocated quota sizes in April 2024.

The mechanism for forming the supplementary quota was tested in 2023. In total, exporters who had shares in the total quota refused to export nearly 815,000 tonnes of grain. There were no leading grain exporters on the "refuseniks" list.

This year, the bulk of the quota is distributed among 261 companies (versus 203 in 2023). Leading exporters received the largest shares. The quota of Green Gates LLC is 4.217 million tonnes (versus 3.242 million tonnes in 2023); the Reef Trade House quota is 3.971 million tonnes (versus 4.909 million tonnes last year); the Aston company has 2.139 million tonnes (versus 2.774 million tonnes in 2023); MZK Export LLC has a quota of 1.307 million tonnes (versus 2.114 million tonnes last year); and OZK Trading (a subsidiary of the United Grain Company) has a quota of 985,749 tonnes (against 1.1 million tonnes in 2023).

Meanwhile, the Agriculture Ministry has taken the initiative to introduce a supplementary quota for grain exports of 4 million tonnes this year. The applicable draft government resolution was posted on regulation.gov.ru on February 12.

"This draft decree from the government of the Russian Federation was developed in connection with updated preliminary data from Rosstat on grain production and consumption, as well as new data from the Federal Customs Service on grain exports," the Agriculture Ministry said.

If the resolution is adopted, the supplementary quota will be distributed among companies that have already received a share in the main part of the quota.

Grain market analysts were positive about this proposal.