Russia, the world’s biggest wheat exporter, will raise its wheat export duties by about 32%, the government said on Friday, as the country seeks to curb exports as it faces a potential supply crisis due to high inflation and poor winter crop conditions. .
Tariffs have been rising by 257 rubles ($2.60) a tonne since mid-August to a level of 4,871.5 roubles, but have failed to hamper exports that have been advancing at near-record pace in recent months. The fee hike also came on the heels of leaked data from the state’s weather forecasting agency that said more than 37% of winter crops are in poor condition or have not germinated due to low soil moisture levels.
This compares with just 4 percent of the crop in poor condition last year and is the worst level ever recorded.
Deputy Prime Minister Dmitry Patrusev, the top official in charge of agriculture, said in comments on the data that the outlook for next year is difficult to predict, although the situation is not yet critical. Major consultants are sticking to their forecasts for now.
“It’s not very dramatic, it’s data from around November 20 and crop conditions may have already improved,” said Sovekan’s Andrei Sizov, who maintained his wheat harvest forecast of 81.6 million tonnes. “We interpret the situation as not so bad, but exceptionally uncertain,” said IKAR consultant Dmitry Rylko, whose 2025 wheat forecast is 79-89 million tons. He said he disagreed with the weather agency’s method of defining crop conditions.
European traders said they doubted Russian authorities decided to raise the export tax because Russian wheat continues to be offered very cheaply, possibly because of the cheap high-volume origin that export shipments are still running at very high levels.
“Despite Russian export taxes, export quotas, minimum export prices and clear punishments for companies that break the minimum export price, Russian wheat continues to be offered to the export market in large quantities very cheaply,” a German trader said.
Traders said the move would potentially be helpful for world prices but only if Russian export prices rise. According to Sovekan, export volumes have been gradually declining over the past two weeks and export prices were largely flat.
Low prices
Unhappy with the low global price of wheat, Russia has set an unofficial price for wheat. Reuters resources, and sought to eliminate middlemen from international trade. The country is also battling inflation, with prices of some staple foods rising in double digits this year.
Traders said Russian 12.5% protein wheat for December/January delivery was late this week, at $223-$227 a tonne on a free-on-board (FOB) basis, the cheapest in the world, up from $226-$231 at the end of last week. has dropped from .
The Ministry of Agriculture has calculated the customs duty based on the indicative price of 233 dollars per ton.
Last month, Russia cut its wheat export quota by two-thirds to 11 million metric tons, effective from February 15 to June 30, 2025, in the second half of the export season.
Analysts at Rusagrotrans, Russia’s major grain rail carrier, forecast Russian wheat exports to fall to 41-42 million tonnes in the 2024/25 season from 55.5 million last season as a result of sanctions and bad weather.
They estimate that Russia has exported 29 million tonnes of wheat to the world market so far this season, meaning exports are likely to slow sharply before the quotas come into force in February.
Wheat is about 90% of all winter crops in Russia. In an officially published report, the weather forecasting agency said that a lack of moisture was observed in the breadbasket regions of southern and central Russia. “If we don’t freeze in winter, we risk not only a bad harvest, but no harvest at all,” said Igor Rozhnov, a farmer from the Black Earth Voronezh region.