MOSCOW (Reuters) – Russia stiffened its bid to curb grain exports on Monday with plans for an imminent duty on shipments to defend domestic bread supplies against a crumbling rouble.
Russia, expected to be the world’s fourth-largest exporter this year with the largest buyers in Turkey and Egypt, has been exporting record volumes of a big grain crop of 104 million tonnes as the rouble fall attracted buyers.
“The time to think about imposing of administrative restrictions on (grain) exports has come,” Prime Minister Dmitry Medvedev told a meeting with officials on Monday, adding Moscow now needed to retain its remaining stocks.
The proposal for an export duty will be finalised within 24 hours, Medvedev’s Deputy Arkady Dvorkovich told the meeting, despite calls from the grain trade for a delay. Medvedev told Dvorkovich to submit the proposal for his signature.
Global wheat prices rebounded after reports of the duty, with the Paris benchmark up one per cent at 1700 GMT.
Russia used a protective duty on wheat exports in 2008. Officials did not say how quickly, at what level or on which type of grain this latest duty would be imposed.
Officials are discussing a prohibitive duty and may impose it earlier than exporters can fulfil already-signed contracts, said an industry source familiar with the discussions.
Traders with forward contracts for Russian grain as far ahead as April are pushing for a change of mind.
A Russian grain exporters’ lobby has asked the government to impose the duty from March 1 so traders can “prepare to work under new conditions”, the National Association of Exporters of Agricultural Products said in a letter to Dvorkovich on Monday.
The lobby also asked the government to consider the option
of going further and imposing an official ban on exports from March, which it said would cool prices quickly.
Analysts however, have pointed out that Moscow, as a member of the World Trade Organisation, cannot ban exports in the same way that it did in 2010.
Last week, Russia imposed tougher rules for grain quality checks and then cut railway loadings of grain for export to stop it from leaving the country, industry sources said.
“Export duties would mean that sellers must still fulfil their selling commitments,” a European trader said. “This means that sellers could not claim under prevention of delivery clauses in international trading rules.”
Russia could export 28 million tonnes of grain without damaging domestic needs, of which 21 million tonnes had already been exported since the start of the 2014/2015 marketing year on July 1, Dvorkovich said.