Russia to introduce export taxes on agricultural products

The Russian government will impose a tax on the export of key agricultural products from today. The tax will target

Screen Shot 2021 01 08 at 2 12 17 PM

Photo: Reuters

The Russian government will impose a tax on the export of key agricultural products from today.

The tax will target the export of sunflower oil and rapeseed (canola) oil, the first measure taken by Moscow to stabilise domestic food prices after President Vladimir Putin criticised the rising price of bread, flour, sugar and sunflower oil in early December.

This measure will be followed by the imposition of an export tax of $30.53 per tonne on wheat between February 15 and June 30. Additionally, an export quota of 17.5 million tonnes will be imposed during the same period in a further attempt to stabilise prices in the face of a major economic downturn spurred by a second wave of the COVID-19 pandemic.

Russia is the world’s third-largest wheat producer behind India and China, and the world’s largest wheat exporter. In 2020, the biggest buyers of Russian grain were Turkey, Egypt and Saudi Arabia; as such these nations will need to rely on supplies from other exporters while the quota is in effect. The most likely candidate for increased supply is the US, the world’s second-largest supplier, due to the preexisting trade relationships between the US and these nations.

Wake up smarter with an assessment of the stories that will make headlines in the next 24 hours. Download The Daily Brief.