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MIL OSI Translation. Region: Russian Federation –

09/13/2021

Experts: the duty on the export of wheat from Russia will grow, affecting the dynamics of the supply rates.

The duty on the export of wheat from the Russian Federation is likely to continue to grow in the near future, against this background, the export may temporarily slow down, and the weak predictability of the dynamics may affect the uniformity of supplies, industry experts told RIA Novosti.

The Ministry of Agriculture of the Russian Federation published on Friday the new value of the duty on the export of wheat from Russia: for the period from September 15 to September 21, its value will be $ 52.5 per ton, becoming the maximum since June 2, when the “grain damper” mechanism was introduced in the Russian Federation – then it amounted to $ 28.1 per ton. The duty is 70% of the difference between the indicative price (arithmetic average of daily price indicators) and the base price (for wheat – $ 200 per ton). For the calculation, data on the price of export contracts registered on the exchange are used.

“The duty (last value – ed.) Was calculated during the period when Russian wheat on FOB (delivery terms – ed.) Cost $ 270 per ton. But in the last few weeks, this level has already exceeded $ 300 per ton, so in theory the duty should increase.” , – said Andrei Sizov, director of the Sovekon analytical center.

How much the level of duty will increase is not clear due to the opacity of the calculation itself, he continued; Meanwhile, against this background, Russia has already lost its position as “supplier number one” of the Egyptian state-owned company GASC. “(The GASC tenders – ed.) Assume delivery in the future with a decent installment plan: thus, the high bid price of Russian wheat includes the risk of an increase in the duty,” Sizov explained.

Elena Tyurina, director of the information and analytical department of the Russian Grain Union, also believes that the duty on the export of wheat from the Russian Federation against the background of rising prices since the beginning of the season may rise; meanwhile, she does not exclude a temporary reduction in supplies in the second decade of September.

Tyurina recalled the record export of Russian wheat in August, when it was quoted 3-4% cheaper than French wheat, and noted that there was no significant decline in the first ten days of September: daily shipments were at 178 thousand tons against 182 thousand tons in August. But on September 9, Russian wheat was already 2% more expensive than French wheat, and Ukrainian wheat – by 4-5%.

Thus, the expert continued, an increase in duties and a decrease in price competitiveness may temporarily affect shipments in the second decade of September, but it is unlikely to seriously slow down exports: after a temporary restriction of supplies, the market will adapt to a new price level, and purchases will start again.

Sizov, in turn, believes that weekly revisions of the duty without definite dynamics can lead to uneven supplies. “If the market sees that the duty will increase from next Wednesday, shipments may accelerate sharply. This was the case, for example, in the last days of August, when over 1 million tons of Russian wheat were shipped over the past few days,” he said.

A source: TKS

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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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