Russia Considers Raising Upcoming Wheat Export Tax
- The current tax is set at 25 euros per tonne of wheat exported from February 15-June 30.
- But, as prices have risen, the government now is considering further increasing the export tax in hopes of the new level having an impact on its domestic market.
- One rumor is that the tax could come in at 50 euros per tonne.
- No official announcement has been made but expectations are that the tax hike would be approved.
- Russia’s wheat prices have risen despite the announced plan of the 25-euro-tax in December, offsetting the government’s hopes of stabilizing domestic wheat prices.
FBN’s Take On What It Means: The move would not be surprising but may not do much good. The problem is that foreign markets are willing to pay more than Russia’s domestic population at current prices, keeping Russian wheat in the export market. A higher tax likely would result in helping push global prices even higher.
Argentina Lifts Corn Export Ban, But Limits Sales
- After farmers rallied at the new restriction of no corn exports until March 1, the government modified its terms.
- Now, Argentina has placed a 30,000 tonne limit on corn export sales per day to foreign countries.
- The move is temporary and is less restrictive than the previous halt.
- The ministry said that this limit will still keep domestic supplies at needed levels and will cushion local prices.
- The more aggressive approach could have resulted in farmers being less willing to invest in corn production, which could cause more problems down the road.
- Argentina typically exports light volumes of corn ahead of its new-crop harvest.
FBN’s Take On What It Means: The government is dealing with serious economic issues including rising food costs, but is trying to also meet farmers’ demands. The bottom line is that there is a shortage of feed grains across the world, even for major exporters, with countries buying normal volumes and China aggressively buying. More changes could come from South America in the coming weeks, especially if weather continues to be less than ideal for Argentina.
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