Russian Minister of Agriculture Alexey Gordeev
Photo: Dmitry Azarov
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Grain Export Ban May Become Duty
The government may reject the Agriculture Ministry's proposed ban on grain exports that would go into force in February of next year. In its place, a prohibitive export duty of 40 percent and no less than ˆ100 per ton may be imposed. That would be less convenient for exporters because a ban would allow them to write off some of their losses as force majeure. Exporters stepped up their activity in the autumn and winter of this year in expectation of the coming ban/duty increase and have made money on world grain prices.
The Ministry of Agriculture drafted a resolution to ban grain exports after February 1, 2008, when they had reached 12.5 million tons. That proposal is now in jeopardy because it would complicate Russia's WTO negotiations. The current duty on grain exports is 10 percent and no less than ˆ22 per ton. That duty was imposed as an anti-inflationary measure. Agriculture Minister Alexey Gordeev motivated the proposed export ban on food security concerns, not economics.
Traders complain of mixed signals from the government. There is a danger of excessive exports while the possibility remains to do so. Record high world grain prices are also affected by expectations of a Russian ban. Russian grain was not offered at recent grain tenders in Egypt and India.
www.kommersant.com
All the Article in Russian as of Dec. 21, 2007
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