March 30 2004, 11:41 FK News

Russia will not be prolonging export duties for grain

According to the Head of Tariff Regulation Department in the Russian Ministry for Economic Development Alexander Filippov, the effect of import duties for grain, which are currently in effect, stops on May 1 and will not be prolonged any further.

The 25 euro/t export duty for grain was established early this year for stabilisation of local grain market, which had started to experience a sharp price growth for grain and grain products (first of all, bread) because of mass-scale exports of grain from the country.

"The increase of duties and the state interventions on the grain market have had a positive effect on stabilisation of domestic market. Willing to affirm the obtained results, the Ministry for Economic Development as early as February made a proposal to prolong the duties, but it has been just on one of these days that the government decided not to do it", Filippov said. He said the situation had changed dramatically over the recent weeks.

A recent analysis has shown that available grain in the country will last until the new crop. Russia consumes about 3 million tonnes of milling grain per month on average, he said. That means, it will need a maximum of 12 million tonnes of grain until the new crop (the end of July). There are now 18 million tonnes available on the market. In other words, cancellation of the export duties on May 1 will not change the situation. Even if the exports liven up again, the traders will not be able to sell the whole of the accumulated stocks until the new crop. According to Filippov, this policy has represented a practical realisation of the idea of agricultural market regulation for stabilisation of the prices. Despite some mistakes and lateness, this policy has delivered an undoubtedly positive result, he believes.