Russia is planning to reduce curbs on wheat shipments, which may lead to an even bigger glut of grain worldwide.
Policy makers are working out the details for cutting the current tax on exports, Deputy Prime Minister Arkady Dvorkovich told reporters Wednesday outside Moscow, adding that the change may happen in May. The government, which started the wheat duty in February as a way to rein in food prices, had previously said it would remain in place until the new crop marketing year starts 1 July.
The country, last year’s fourth-biggest wheat exporter, has sought to protect domestic grain supplies amid surging food inflation and a weakening ruble. Since the tax was put in place, shipments from Russia plunged by more than half and importers shifted purchases to other suppliers including the European Union.
“Russia will be the cheapest wheat in the market if the export duty goes away,” Stefan Vogel, head of agricultural commodities research at Rabobank International, said by phone from London. “It gives the market a bit of an optimistic picture for the supply of wheat for the global market.”
Recent rainfall has improved the prospects for Russia’s next harvest. The country may produce as much as 59 million tons of wheat, more than previously expected and near the level of the prior year, according to the Institute for Agricultural Market Studies, a Moscow-based researcher.
Bloomberg News, edited by ESM
