Russia's measures to stabilize domestic food prices
March 27 (Reuters) - Russia plans to impose high export taxes on sunflower oil and sunflower seeds until September 2022 in its battle to tame the country’s rising food inflation, its ministries said on Saturday.
Russia’s annual inflation had spiked to 5.8% as of mid-March and is only expected to slow to its central bank’s 4% target in the first half of 2022, later than previously expected.
Below is a list of the measures, which were initially approved in December and then toughened in several rounds. New measures are marked with *:
- Russia has set a grain export quota for overseas shipments of wheat, rye, barley, and corn (maize) of 17.5 million tonnes for Feb 15 to June 30.
- Russia initially introduced a wheat export tax of 25 euros ($29.5) within that quota from Feb. 15 and then raised it to 50 euros from March 1. If exports exceed the quota, the tax for wheat will be raised to 50% of the customs price, but no less than 100 euros per tonne.
- Russia launched a barley and corn export tax of 10 euros per tonne and 25 euros per tonne respectively from March 15. The exporting duty for rye within the quota is at zero.
- Starting from June 2, Moscow will launch a permanent formula-based export tax for wheat, barley, and corn.
The formula for wheat will be set at 70% of the difference between a base price of wheat per tonne and $200.
The base price will be determined by the agriculture ministry on a weekly basis, based on price indicators traders would report to it.
The formula for barley and corn will be similar to wheat, but will use $185 instead of $200 for calculations.
SUGAR, SUNFLOWER OIL, OTHER PRODUCTS
* - Russia’s export duty for sunflower seeds is set at 30%, but not less than 165 euro/tonne, between Jan. 9 and June 30. The government plans to raise it to 50%, but not less than $320/tonne, for the period between July 1, 2021 and Sept. 1, 2022.
For the same period, a tax on rapeseed exports is planned at 30%, but not less than 165 euro/tonne.
* - Starting from September, an export tax on sunflower oil is planned for one year. Officials plan to set it at 70% of the difference between its indicative price per tonne, which will be determined based on Reuters’ data, and $1,000.
* - The government plans to eliminate taxes on imports of up to 350,000 tonnes of white sugar between May 15 and Aug. 31.
- The government approved its right to regulate domestic prices for 24 “socially important products” – such as bread and other food staples – for 90 days if their two-month price growth exceeds 10%, excluding seasonal factors.
* - It is closely monitoring domestic prices for these 24 products. Prices for chicken meat and eggs are currently part of “soft negotiation mode” and voluntary commitments between the agriculture ministry and producers.
* - Russian sugar and sunflower oil producers have agreed price reductions for their products with retail chains. The current agreement is in place until the end of March.
The government has asked them to extend the agreements on sugar until June and for sunflower oil until October. ($1 = 0.8477 euros) ($1 = 75.6480 roubles) (Reporting by Darya Korsunskaya and Polina Devitt. Editing by Jan Harvey.)
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