Russia’s ag ministry proposes to cancel wheat export tax

Moscow | Reuters — Russia’s agriculture ministry has proposed to the government to cancel a tax on wheat exports from July 1 when the 2015-16 marketing year starts, a source at the ministry told Reuters.

Russia imposed the duty on wheat exports between Feb. 1 and June 30 in an effort to cool domestic food inflation as the rouble tumbled.

“We have sent a letter to the government with our proposal to cancel the duty starting from July 1,” the source said. “But it’s only a recommendation, the government will be making the final decision later.”

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Prime Minister Dmitry Medvedev has previously asked his ministers to submit proposals by mid-April on a possible extension of the tax beyond July 1.

The government plans to hold a meeting on the tax in May or in early June when 2015 crop prospects are clearer, the source added.

Deputy Prime Minister Arkady Dvorkovich, who is in charge of the agriculture sector, has previously said the government could extend the tax from July 1, leaving traders uncertain and delaying forward contracts for the new marketing year.

A representative of Dvorkovich said on Friday the agriculture ministry’s letter had been received and was being studied.

The ministry is currently keeping its 2015 grain harvest forecast unchanged at up to 100 million tonnes, down from a near-record crop of 105.3 million tonnes in 2014.

According to the ministry, the tax has allowed Russia to stabilize the market situation as domestic prices are declining and exports are running slower, the source added.

The country’s grain stocks at farms and procurement and processing companies, excluding small farms, were up 17 per cent from a year earlier to 22.7 million tonnes as of April 1, data from the statistics service Rosstat showed.

The tax is set at 15 per cent of the customs price plus 7.50 euros, but not less than 35 euros (C$46) a tonne.

Reporting for Reuters by Polina Devitt in Moscow.

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