UPDATE 2-Russia may rule on grain duty in 2 weeks-dep agmin
Russia is considering a protective grain export duty to put a brake on record exports, Deputy Agriculture Minister Ilya Shestakov told Reuters on Tuesday.
“We are actively discussing it. It is an important aspect of our activity. No one is denying the likelihood,” Shestakov said on the sidelines of a grains conference held by the Institute for Agricultural Markers Research (IKAR).
“We are constantly monitoring export volumes. The decision will be made in advance,” he added. “There are quite a few precursors for introduction of a duty.”
Traders and analysts said last week they expected Russia’s government, which has said Russia should export no more than 23-25 million tonnes of grain during this crop year, would consider imposing export duties from April, when exports are likely to hit that level.
Shestakov said assumptions that the duty could be introduced from April were “groundless”. He declined to comment on the government’s target volume.
The head of Russia’s Grains Union, however, said the government was discussing a levy from April onward, according to plans now under discussion by the Russian government.
Arkady Zlochevsky said the Grains Union had approached Prime Minister Vladimir Putin before the new year to ask that the government abandon consideration of the duty.
Putin was due to meet the agriculture minister later on Tuesday to discuss the meat industry.
His government raised the possibility of a duty as its preferred method of controlling exports before it lifted a ban on exports imposed to protect domestic supplies after a catastrophic drought in the summer of 2010.
“If no duty is introduced, I think we’ll call a halt at about 27-28 million tonnes,” Zlochevsky told reporters at the conference, adding that domestic prices would become a limiting factor on exports.
Russia has been a bullish factor on world wheat markets in the last week, first because of speculation that the duty would be imposed to limit exports, then because of hard frosts which caused concern about Black Sea exporters’ crops.
The government would base its decision on February exports, Shestakov said. By the middle of February, he said, the government would be able to forecast shipments for the full month and announce its decision.
“It is a matter of about two weeks,” Shestakov said.
Prices for Russian export wheat jumped as much as $6 per tonne last week as traders confronted bare elevators in Russia’s southern export regions and hesitated to buy grain inland for export, fearing export duties.
One trader said talk of a ban was pressing exporters to maximise shipments before the ban made them unprofitable, pressing toward the government’s declared limits more quickly.
“It’s a chicken-egg situation,” a trader said.