Nov 11, 2021

Russia Looks to Revise Wheat Export Tax

New formula will be revised upward if prices climb substantially

Russia Looks to Revise Wheat Export Tax, Set Export Quota

  • Russia is exploring changing its grain export taxes in case of further price increases in global markets.

  • The formula-based duty was launched earlier this year as a measure to stabilize domestic food inflation and is determined on a weekly basis based on price indicators.

  • If changed, the new formula will be revised upward if prices climb substantially.

  • Russia is looking to move up its expected grain export quota from February 15 to January 1; the quota would run through June 30, which would be another measure that likely would lead to further global price increases.

  • The quota would be based on Russia’s 2021 crop and the pace of exports since July, when the marketing year began.

FBN’s Take On What It Means: Russia, the world’s largest wheat exporter, continues to grapple with domestic food inflation, which is running at 6-7% despite measures the government has taken. The current export tax has not solved Russia’s inflation problem and Russian FOB wheat remains competitive on the global export scene. Wheat markets jumped on the news given how tight global supplies are. USDA raised Russian wheat exports by one million tonnes in the November WASDE and the exporter has enough supplies to export more.

FBN
FBN

Brazil Forecasted to Export 2.9 MMT of Soybeans in November

  • Brazil’s grain exporters’ association Anec increased its forecast for soybean exports in November.

  • Exports are expected to reach 2.6 million tonnes, a 700,000 tonne increase from last week’s estimate of 1.9 million.

  • In November 2020, Brazil shipped 770,328 MMT.

  • If confirmed, annual exports through the first eleven months of 2021 will reach 84.5 MMT; the annual record for Brazilian soybean exports was set in 2018, when the country shipped 82.8 MMT.

  • Corn exports were also revised up to 2.6 MMT from 1.9 MMT; however, total corn exports are down 46.4% on the year.

FBN’s Take On What It Means: While US beans continue to be the most competitive spot for FOB beans, Brazil has continued to see strong export numbers at a time when the US should dominate shipments. The US slowdown is compounded by weak demand from China. The USDA in yesterday’s WASDE lowered 2021/22 US bean exports by one million tonnes, while raising Brazil’s by the same amount.

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Kevin McNew

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Magazine

Marketwatch: Nov, 28

cmdty National Corn Price Idx: ZCPAUS.CM

open: 5.5712
high: 5.7406
low: 5.5262
close: 5.7276

cmdty National Soybean Price Idx: ZSPAUS.CM

open: 12.1595
high: 12.1807
low: 12.0432
close: 12.166

cmdty National Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 8.331
high: 8.4769
low: 8.226
close: 8.444

cmdty National Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.7213
high: 7.8263
low: 7.6213
close: 7.7716