Voluntary Report - Public distribution

**Date:** 10/10/2007

**GAIN Report Number:** RS7068

RS7068

**Russian Federation**

**Grain and Feed**

**Grain Export Tariffs Coming in November**

**2007**

**Approved by:**

![](media/image1.wmf)Allan Mustard

American Embassy

**Prepared by:**

Yelena Vasslieva and Allan Mustard

**Report Highlights:**

The Russian Government will impose export tariffs on barley of 30% ad
valorem and on wheat of 10% ad valorem in November. A decision on grain
intervention (release of domestic stocks) may follow, depending on
market conditions. The Russian Ministry of Agriculture estimates the
2007 grain crop at about 80 million metric tons clean weight.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Moscow \[RS1\]

\[RS\]

**Grain Export Tariffs**

At a press conference October 10, 2007, Russian Minister of Agriculture
Aleksey Gordeyev announced formally that export tariffs on barley of 30%
*ad valorem* and on wheat of 10% *ad valorem* will be published soon,
and will go into effect 30 days after the official date of publication.
Minister Gordeyev added that a decision on wheat interventions (release
of government-owned reserves to stabilize the market) will be made after
the reaction of the grain market to the export tariffs has been
evaluated. This decision is not expected before February 2008. Minister
Gordeyev predicted grain exports at 12 million metric tons (mmt) out of
this year's crop.

**Grain Harvest**

Minister Gordeyev stated that the grain harvest had been completed 20
days earlier than in 2006, and that with 99 percent of sown area
harvested, the gross outturn of grain is estimated at 86 million metric
tons bunker weight. This translates into about 80 million metric tons
clean weight (after drying and cleaning), which is higher than in 2006,
and which exceeds the Russian Ministry of Agriculture's July forecast by
4 million metric tons. The increased output is due to better crop
conditions in Western Siberia than were expected, which more than
compensated for severe drought in the Volga Valley and Rostov Oblast.
Minister Gordeyev added that rice output was up in 2007 due to
"stabilization in the interests of investors."

**Comments**

In anticipation of Gordeyev's announcement, Russian grain traders worked
feverishly in September, shipping a new monthly record of 2.4 million
metric tons (the previous record was 2.1 million metric tons in November
2002). Of this volume, 2.1 mmt was wheat, and 300,000 tons was barley.
Exporters will continue to scramble over the next 30 days to get as much
wheat and barley shipped as possible before the export tariffs go into
effect, after which wheat shipments will slacken and barley exports
could potentially stop. The 10% export tariff on wheat will moderate
wheat exports but is unlikely to bring them to a complete halt, given
short global supplies.

The Russian government is aware that imposing a prohibitive export
tariff on wheat would be catastrophic for the Russian grain trade's
already checkered reputation for reliability as a supplier. As noted
previously (GAIN report RS7320), the Russian Grain Union has called on
the government to avoid upsetting the grain market precisely for that
reason.

The impact of this announcement will likely be a slight moderation in
Russian domestic wheat prices just in time for the Duma elections in
December, with the possible wheat interventions timed for the month just
prior to the March Russian presidential elections.

Minister Gordeyev's cryptic reference to "stabilization in the interests
of investors" was most likely an allusion to the impact of efforts to
protect the Russian rice market on behalf of Russian holding companies,
notably Razgulyay-Ukrros, who are investing in rice production in
Krasnodar Kray.

**Other Relevant Reports**

RS7320 Grain and Feed / Grain Interventions and Export Tariffs Likely

http://www.fas.usda.gov/gainfiles/200709/146292480.pdf

RS7059 Grain and Feed / September Monthly Update

http://www.fas.usda.gov/gainfiles/200708/146292218.pdf

RS7054 Grain and Feed / July Rice Update

http://www.fas.usda.gov/gainfiles/200707/146291832.pdf

RS7033 Grain and Feed / Annual

http://www.fas.usda.gov/gainfiles/200704/146280791.pdf

RS6069 Grain and Feed / VPSS Eases Rice Import Ban for Shipments On the
Water

http://www.fas.usda.gov/gainfiles/200612/146269766.pdf

RS6066 Grain and Feed / Russia Temporarily Bans Rice Imports

http://www.fas.usda.gov/gainfiles/200612/146249713.pdf