The Russian government has imposed duties on grain exports. The new ban is unlikely to directly affect the cost of bread in Russian stores, experts say. However, the drop in profits from exporters because of the new collection could hit farmers warn participants of the market.
At the end of the week the government introduced restrictive tariffs on wheat exports, which will take effect from February next year. “Decree from February 1, 2015 introduced export duties on wheat in the amount of 15% of the customs value plus € 7,5, but not less than € 35 per 1 ton», – says in the document signed by the Prime Minister Dmitry Medvedev.
The restrictions are designed to reduce the volume of export of grain abroad, which, according to state officials, in part causes an increase in food prices. Earlier in the week to this urged Federation Council Speaker Valentina Matviyenko, saying that grain exports may harm the interests of Russia and raise the costs of products.
Since the export of grain and tried to fight other methods. For example, earlier this week the Railways took a decision to increase the tariff on grain exports from January 2015 13.4% “due to the limited bandwidth infrastructure to export routes.” Also in mid-December, the company restricted loading grain for export for similar reasons, but this decision was canceled in a week, almost immediately after the introduction of export duties.
This year may prove to be very successful for Russian farmers in terms of cultivated and exported products. In 2014, according to the Ministry of Agriculture, the grain harvest in Russia exceeded 105 million tons, compared with last year’s 92.4 million tons. Due to the weakening of the ruble (the year the ruble fell against the dollar and the euro by nearly 59 and 41%, respectively. – “Times”) has been extremely beneficial to producers supply raw materials abroad, which influenced the dynamics of exports. According to forecasts of analytical agency “ProZerno” supply of wheat abroad in the new year can be a record: to exceed last year’s results by 5.2 million tonnes and 23.5 million tonnes achieved.
It is expected that the introduction of the tariff for the sale of wheat abroad will help contain rising prices in the domestic market and, consequently, on the related products. However, according to providers and experts, a large effect such measures are not expected.
The fact is that in Russia the share of the cost of wheat in the final price of bread is not more than 20%, says “newspaper. Ru »General Director of the Institute for Agricultural Market Studies (IKAR) Dmitry Rylko. “For this reason a strong deterrent effect on the value of goods export duties will not have – he says. –
Food inflation and the increased cost of wheat – it is not the consequences of growth of exports, and the devaluation of the ruble, with which we should fight ».
Wheat – export commodity, so its price is linked to the dollar. All manufacturers are oriented exactly on the export market as the biggest, but exports are not an end in itself, agrees vice president of the Russian Grain Union (RGU), Alexander Korbut. Export duties may have only a short-term lowering effect on wheat prices, but not the cost of the final product, he said.
«increase the supply – prices fall. But I can assure you that the decline in purchasing prices for grain in no way affect the price of bread, flour and meat, perhaps a little slow their growth – that’s all, “- said Korbut.
On the other hand, export duties may adversely affect Russian companies. Additional costs for the implementation of existing contracts will be borne by exporters and shipping companies that store ready to ship cargo transport. They can not change or break contracts signed, pay attention branch organizations.
Exporters will certainly incur significant losses, Rylko said, as many have already signed export contracts for January and February, and now they need to fulfill them. This product has already bought, so share the burden of duties with customers or suppliers will not work, he says.
The National Association of exporters of agricultural products (NAESP) believe that in the current economic situation, the optimal measure would be a total ban on export of grain from Russia, rather than the imposition of export duties.
The export ban would play into the hands of exporters, since it can be represented as a force majeure event, noted in the organization .
In the future, additional costs and expenses associated with the payment of fees will fall exclusively on manufacturers, Korbut said.
«Regulation farmers is worrying, because now for them sounded a clear signal: “You do not get extra income,” – said the representative of the RGU.
According to him, the introduction of fees in the procurement of grain exporters will ask manufacturers to lower the price just by the amount of the tariff. In addition, the market will affect indexed rates for export grain shipments by rail, believes Korbut.
In the medium and long-term duties may affect the willingness of farmers to develop their own production. Now farmers need to make a decision on the sowing campaign of 2015, says the source “Gazety.Ru”. However, as a duty, as well as costs, increased cost of production (in which there is a significant portion of the foreign exchange component such as fertilizers, pesticides and fuel) greatly complicate them accomplish the task.
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