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Russian govt mulls amendment of grain export dutyТs calculation

MOSCOW, Jun 23 (PRIME) -- The Russian government is discussing amending the grain export duty formula as it plans to switch export settlements into rubles, Arkady Zlochevsky, president of the Russian Grain Union, told PRIME on Thursday.

Since June 2021, Russia has been using a flexible system of grain duty calculation based on the price of export contracts registered at the exchange. The money is returned to the farmers in the form of subsidies, but agricultural companies have repeatedly asked for cancellation of the duty as coupled with falling domestic prices, it slashed profits of farmers as their costs rise.

УThe discussion is going on. It is not about switching settlements for grain in rubles, it is about revision of the formula. The formula is denominated in U.S. dollars, and creates additional risks as we are unable to switch the settlements into rubles and ensure competitiveness of exports as long as it is denominated in U.S. dollars, so the discussion is going on about changing the approach completely,Ф Zlochevsky said.

Revision of the dutyТs formula will be good for the market, but the union and the companies want the government to abolish the duty completely, and to introduce export quotas if it wants to maintain resources within the country and avoid excessive exports, he said.

УWe have to change the economic situation before the autumn sowing, as the current harvest will drain the remaining resources, while there will be no new money because of the duty, meaning that there will be no sources for the autumn sowing campaign. The internal prices are falling, excessive grain harvests are exerting pressure, and what money shall we spend on sowing in autumn? We have warned about these risks many times,Ф he said.

The Agriculture Ministry and the Economic Development Ministry are yet to provide a comment.

End

23.06.2022 18:01
 
 
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