IARN — Russia is imposing a wheat export tax of 25 euros per ton after President Vladimir Putin recently criticized the impact of excessive inflation.
Russian officials made the wheat export tax announcement on Monday, followed by the country’s Prime Minister signing a list of orders on Tuesday which aimed at stabilizing food prices. Allendale commodities broker Greg McBride tells the Iowa Agribusiness Radio Network the added wheat export tax will be applied to all of Russia’s wheat sales from February 15th through June 30th.
“What this looks like to (the U.S.) is that it puts Russia in the driver’s seat from now until about that February 15th timeframe to frontload those exports,” McBride said. “After which, we’re hoping this means that some of that wheat export business will shift to the United States.”
Reports say the action from the Russian government also included a quota for overseas shipments of wheat, rye, barley, and corn – limiting exports to 17.5 million metric tons over the same period. McBride believes this could trigger Chinese purchases from the U.S. in early 2021.
“China, if they are deterred from buying Russian wheat, will start to look to the United States because their situation with Australia and Canada at this point will keep them looking to the United States,” McBride said. “Plus, it gives us maybe more of an insight into possibly selling to some of the world’s bigger importers of wheat such as Egypt, which we don’t see a lot of purchases from them as is.”
McBride adds this news from Russia comes as the country has harvested a large wheat crop this year.
“For (Russia’s) winter wheat, they have a very poor situation going on with that winter wheat,” McBride said. “This is the worst that they have seen in years going into dormancy. Their concern is they will be short on next year’s crop.”
Russia is one of the largest wheat exporters in the world.
Story courtesy of the Iowa Agribusiness Radio Network.
Image source: Wikimedia Commons
