Moscow | Reuters — Russia, one of the world’s largest wheat exporters, is not expected to change its current regime of taxes on grain exports, sources said on Friday, following proposals to change them.
Concerns over the possibility of tougher limits on Russia’s foreign sales of wheat sent global prices to a one-month high earlier this week.
However, the agriculture ministry proposed removing or cutting the export tax on wheat, while imposing one on barley and corn.
“They will not change anything,” one industry source said on Friday after a meeting with Deputy Prime Minister Arkady Dvorkovich, who is in charge of agriculture.
Dvorkovich’s spokeswoman, Aliya Samigullina, told Reuters that no decision had been made at the meeting.
Any decision to reduce the tax would have been a blow for other exporters, including the European Union, the U.S. and Argentina, a German trader said.
“This would keep Russian competition in wheat export markets high at a time when falling oil prices have reduced purchasing power in some of the biggest Middle East grain importing countries,” he said.
Russia could yet consider a downgrade of the wheat export tax and will decide on the matter on Feb. 3, Dmitry Rylko, the head of agriculture consultancy IKAR said.
But officials are unlikely to approve this idea, three sources with knowledge of the matter said.
Russia has a floating tax on wheat exports; the formula is set at 50 per cent of the customs price minus 6,500 rubles (C$121) per tonne but not less than 10 rubles per tonne.
Dvorkovich said earlier on Friday that he saw no need to change the existing wheat tax for now unless there were extraordinary reasons to do so.
Russia originally imposed the wheat export tax a year ago when the ruble’s fall boosted domestic grain prices.
Since then, anxiety over domestic prices has eased, said Andrey Sizov, the head of SovEcon agriculture consultancy.
The government can sell some grain from domestic stocks, if it needs to cool prices without changing export regulation, one trader said.
— Reporting for Reuters by Polina Devitt and Michael Hogan.