Russia is considering a gradual switch for state export taxes for grains and sunflower seeds from US dollars to rubles at the behest of commodities traders, Reuters reported, citing the Interfax news agency.
Two industry sources told Reuters that traders had been asking the government to change the mechanism for the wheat export tax, set by Russia’s agriculture ministry at $142, which at the current exchange rate would be 7,568.61 rubles, per tonne, for June 22-28, but there was no agreement among officials.
Russia, the world’s largest wheat exporter and a major supplier of sunflower seeds, is facing a raft of US and European sanctions following Moscow’s decision to send troops into Ukraine on Feb. 24. The war in Ukraine has sent grain prices worldwide skyrocketing and threatened food security in underdeveloped nations, particularly those that rely on the Black Sea nations for their grain.
Russia’s grain exports have been constrained as the new marketing season starts on July 1 amid a high export tax, strong ruble, problems with freight and lack of forward sales caused by the sanctions, though transactions for food, agricultural products and medical supplies are exempted.
“Government ministries are discussing modernization of the grain and sunflower seeds’ tax mechanism to preserve profitability and investment attractiveness of the Russian farmers,” a government source said, according to Interfax. “It is a matter of giving a certain discount to the export duty, taking into account the risks of declining profitability of production. This will not affect the domestic prices but will support exports.”