Russian Parliament to recommend cancellation of grains export duties: Interfax

Russia's State Duma, or lower house of parliament, asked the government Feb. 16 to reconsider the duties that it introduced on grains exports a year ago, the country's Interfax news agency reported.

Russia is the world's largest wheat exporter and its exports of the basic food crop are currently taxed at $92.80/mt, which is equivalent to almost a third of the FOB price

Interfax cited materials prepared for a parliamentary hearing. It stated that the introduction of a floating tariff at a time of increasing production costs for agricultural production had led to "a critical reduction in the [sector's] profitability and forced [producers] to refocus on the production of more profitable crops, principally sunflowers, soybeans, flax and peas."

Russia imposed duties on a range of exports of a variety of grains in February 2021, initially at fixed rates and then at a variable rate from June 2021 onwards. For wheat, the amount is calculated as 70% of the difference between $200/mt and the average of export prices on a FOB basis during the 60 days preceding the day of calculation.

The duties were introduced following a period of rising prices for consumer staples in Russia, amid fears that higher international grains prices could fuel domestic inflation.

The US Department of Agriculture predicts Russia will export 35 million mt of wheat in the 2021-22 marketing year (July 2021-June 2022), which represents 17% of total global exports.