Russia seen adding new informal grain export curbs in 2015

Moscow | Reuters — Russia has strengthened informal curbs on grain exports since the start of the year, further complicating trading before the introduction of an export tax, a Russian grain exporters’ lobby said Tuesday in a letter to officials.

Russia, expected to be the world’s fourth-largest exporter this year, hopes export curbs will cool domestic grain prices and constrain food inflation as it tackles a financial crisis linked to plunging oil prices and Western sanctions.

These curbs “complicate trading operations and completely stop them from time to time”, the National Association of Exporters of Agricultural Products said in a letter to Deputy Prime Minister Arkady Dvorkovich and other officials.

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Moscow imposed tougher quality monitoring in December and later decided to impose a tax on grain exports from Feb. 1.

The grain exporters’ group listed a new set of curbs, including more and longer quality monitoring by food safety watchdog Rosselkhoznadzor and delays on getting the final documents needed from ports for loaded ships to set sail.

The association, which accounts for more than 75 per cent of the country’s grain exports, asked the government to ease the curbs so traders could meet their contracts before the export tax is imposed.

“More complicated”

The tax, or a duty on wheat exports, will amount to 15 per cent of the customs price plus 7.5 euros and will be no less than 35 euros (C$49.25) per tonne until June 30.

“Problems are becoming more complicated in two ways — through technical and economic measures,” said Dmitry Rylko, head of IKAR agriculture consultancy. “They make Russia’s grain less competitive on the global market.”

Russia, which has imposed grain export curbs for the third time since 2008, had been exporting record volumes from a large grain crop of 105 million tonnes before the limits.

Its main wheat buyers are Turkey, Iran and, vulnerable to supply disruption, Egypt.

Russian officials also hope the curbs will make it cheaper for the Agriculture Ministry to replenish its stocks, and, according to traders, domestic prices are declining.

However, the ministry is still far from its goal of buying up to 3.5 million tonnes of grain this 2014-15 marketing year, which started on July 1, as its prices are lower than the market price. It has bought 308,860 tonnes of grains so far, including 8,505 tonnes acquired during a tender on Tuesday.

Reporting for Reuters by Polina Devitt in Moscow.

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