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MIL OSI Translation. Region: Russian Federation –

03/14/2021

Since March 15, after wheat, export duties will be imposed on barley and corn, which are used in animal feed. The duties will reduce domestic prices for these crops and, hence, the cost of meat production.

The duty on wheat of 50 euros per ton has already reduced prices on the domestic market, says Igor Pavensky, head of the Rusagrotrans analytical center. Since the beginning of March, the export rates have decreased by about 4 times. And prices in the center of the country since the beginning of the year have fallen from 15.5 thousand to 13 thousand rubles per ton (excluding VAT).

The same effect is expected from duties on barley (€ 10 per tonne) and corn (€ 25 per tonne). On the eve of their introduction, the rate of export of these crops accelerated 2-2.5 times. But then it will slow down, domestic prices for crops and, consequently, feed will decrease. This will affect the final product after 2-3 months, Pavensky predicts.

Poultry producers, in particular, are counting on this. Prices for it have increased by more than 8% since the beginning of the year due to the growth in the cost of feed and bird flu. But for the next 2-3 months, manufacturers have agreed not to increase them. Then they count on lower prices for fodder crops. However, Elena Razumova, advisor to the president of the Center for Strategic Research (CSR), believes that in addition to exports, seasonal factors will also affect the price of grain. Therefore, before the start of the new harvest, it is unlikely that the upward trend in the cost of feed will drastically slow down, even taking into account the duty, she said.

It is premature to talk about fixing prices for wheat at a level acceptable to processors. If the prices for flour remain the same, the price of wheat should decrease by another 0.7-1 thousand rubles per ton, says Natalya Zagorskaya, head of the Russian flour association. Last week, agricultural producers even tried to raise prices by about 200 rubles. per ton.

Export duties have already lowered the price of wheat and, therefore, the cost of producing flour and bread

Until June 2, the export duty on wheat is 50 euros per ton. And from June 2, floating duties will be set on wheat, barley and corn. They will be calculated based on world prices. The non-taxable part for wheat will be $ 200 per ton, for corn and barley – $ 185 per ton. Above this price will be subject to a 70% duty. The funds received in this way will be returned to the farmers. The Ministry of Economic Development plans to introduce a similar damper mechanism for vegetable oils from the new season.

According to the head of the Ministry of Economic Development Maxim Reshetnikov, it is important that the money collected with the help of this mechanism returns to the agro-industrial complex and does not stop investments. Therefore, the departments “will be very careful to look for this balance.” “Our task is to cut the peak of prices on world markets and at the same time provide an opportunity to further develop investments,” Interfax quotes him.

Duties can effectively smooth out the impact of global price increases on the domestic Russian market, according to the Central Bank’s Research and Forecasting Department. But the floating duty carries a number of threats in the long run. Thus, farmers can reduce the sowing of crops that are regulated by the duty. In addition, there is a risk that the funds collected from duties may be distributed among unprofitable farms, the Central Bank notes.

A source: Russian newspaper

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EDITOR’S NOTE: This article is a translation. Apologies should the grammar and / or sentence structure not be perfect.

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