Source: Zol.ru (Russia)
The government announced a significant Russian wheat export duty increase, effective September 3. Consequently, the levy will rise 4.2 times from current levels, impacting global trade flows.
Details of the Russian Wheat Export Duty Increase
The new calculation formula will sharply raise export costs. Specifically, the duty will be calculated based on a higher base price. Moreover, the minimum threshold for duty application has been adjusted downward.
Key Changes Effective September 3:
- Duty rate multiplier increases by 4.2 times
- Base price reference shifts to $325 per ton
- Minimum price threshold reduced to $200 per ton
A Ministry representative stated, “This adjustment is necessary to stabilize domestic prices and ensure food security. The new structure will remain in effect through the end of the year.” This confirms the policy’s duration.
Expected Market Impact and Reactions
Traders anticipate reduced Russian wheat competitiveness initially. However, global prices may rise as buyers seek alternatives. Furthermore, domestic Russian wheat prices could decline slightly due to reduced export demand.
Long-Term Implications and Outlook
The duty increase may reshape trade patterns long-term. Ultimately, other exporters like the EU and Ukraine might gain market share. Finally, the policy will be reviewed again in December 2023 based on market conditions.