Consequences of state regulation of Russian wheat exports

UkrAgroConsult

Article author:

Maryna Marynych

Grain Market Analyst

Russia’s 2020 wheat crop was the second highest on record. This could have positively influenced exports as well – consolidating the country’s position in its traditional markets and opening up new ones.

Taking into account reduced production in competing growers (Ukraine and the EU) and high world prices, farmers could have gained high profits to be used next season for buying new machinery, elite seeds, additional fertilizers and plant protection products that would benefit the overall development of agriculture.

However, the government decided to “surprise” the market with a tariff quota – apart from the grain export volume limit of 17 MMT, a wheat export tariff of EUR 25/MT came into effect from February 15, which was doubled from March 1.

The shipments peaked in the last week before the customs duty imposition (February 15), when roughly 1.4 MMT was shipped abroad. Then exports fell sharply.

One more reason for the slowdown in Russian wheat exports is uncompetitive price, UkrAgroConsult reports.

To find a few possible scenarios of future developments in Russian wheat market please see the full version of the article that is available to subscribers for Online Analytics “Black Sea Grain” in the new innovative tool for agri market participants – AgriSupp by UkrAgroConsult. Subscribe to a 3-day free trial!!

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UkrAgroConsult

Tags: Russia, export, grain, quotas