Russia: Government considering tax on exporting wheat, barley, and other commodities

Russian officials are considering imposing a wheat export tax of for Feb. 15-June 30 as one measure to stabilise domestic prices, four sources familiar with discussions told Reuters on December 11.

The sources familiar with government plans said the tax could be set at around 2,000 roubles ($27.3) per tonne.

One of the sources said that a tax of 25 euros ($30.30) is also under consideration.

He also said that the government plans to introduce temporary quotas for overseas shipments of wheat, rye, barley and maize.

The source said the quota may be set at 17.5 million tonnes for all the grains, as previously proposed.

The exporting duty for rye, barley and maize within the quota is planned at zero. A duty of 25 euros per tonne might be levied on wheat exports within that quota, the source said.

If the exporting volumes exceed the quotas, the tax for the grains will be raised, he said, to as high as 50% of the customs price, but no less than 100 euros per tonne.

Russia is also considering imposing a price cap for domestic sunflower oil and sugar prices following President Vladimir Putin's criticism of rising food prices.

Discussions at several ministries are still ongoing, the sources said.

Officials are considering a unified size of export tax for all classes of wheat - despite varied prices for them - as it would make it easier for them to manage payments, one of the sources added.

The agriculture ministry did not reply to a Reuters request for comment.

Such a single-sized tax, if approved, would be a step back from a formula-based tax which Russia used in times of sharp wheat price growth several years ago.

Domestic prices for the 3rd class of wheat in the European part of Russia and excluding delivery were at 15,950 roubles ($215) per tonne at the end of last week. Export prices for wheat with 12.5% protein in the Black Sea ports were at $252 a tonne on a free-on-board (FOB) basis.

Putin criticised officials and market players over rising prices for bread, flour, sugar and sunflower oil earlier this week amid the COVID-19 crisis and Russians' falling incomes.

Prime Minister Mikhail Mishustin has said Russia would take action and requested the ministries submit proposals by Dec. 14, 0600 GMT.

Earlier on December 11, Sovecon agriculture consultancy said it had downgraded its forecast for Russia's 2021 wheat crop to 76.8 million tonnes from the previously expected 81.0 million tonnes.

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