The Russian government's decree imposing a 40 percent export duty on wheat, meslin (wheat and rye mixed), and barley, but not less than EUR 0.105 per 1kg, will take effect on January 29, 2008. The document was signed by Prime Minister Viktor Zubkov on December 28. The measure, which almost quadruples Russia's protective duties on grain exports, will apply until April 30, 2008.
On October 8, the Russian government decided to introduce export duties on wheat and barley, at the same time lowering import duties on milk, butter, cheese and sour cream. The export duty on grain was set at 10 percent of contract price but not less than EUR 22 per tonne, and at 30 percent for barley, but not less than EUR 70 per tonne.
The government's decision to introduce grain export duties and carry out so-called "grain interventions" (selling grain from the state intervention fund) was prompted by spiraling prices for bread products. In October and November, Russian traders significantly increased their grain exports, making Russia one of the world's leading grain exporters. World prices for grain were at least three times higher than on the domestic market.
" Russia has to make the necessary corrections and restrict exports," Agriculture Minister Alexei Gordeyev said earlier this month. "Any country cares about its food security, keeping the balance between production and consumption," he stressed. Grain prices are high both in Russian and foreign markets, which "leads to an unjustifiable increase in exports," the minister said.
At the same time, he said Russia would lift all restrictions on grain exports in 2008 if the balance between consumption and production restored and the situation stabilized. The decision to lift the limitations could be based on harvest forecasts that could be announced in April, according to Gordeyev.
In the Agriculture Ministry's estimation, Russia will export between 12.5 million and 13 million tonnes of grain by February 1, 2008, having harvested 81 million tonnes of grain in 2007, the best result over the past five years. When Russia's grain output rises to 90 million tonnes, the country could export between 20 million and 25 million tonnes, Gordeyev noted. Under the state program for the development of the agricultural sector and regulation of agricultural markets in 2008-2012, the country's annual grain output is projected to be between 100 million and 110 million tonnes.
"The rest of the grain production increase should be used to support livestock breeding. Over the past seven to eight years Russia has been exporting from 10 million to 15 million tonnes of grain a year, while importing the same amount if calculated in terms of meat imports. Many countries exporting meat products have a higher level of state support for livestock breeding," Gordeyev conclusion.