Voluntary Report - Public distribution

**Date:** 10/16/2007

**GAIN Report Number:** RS7070

RS7070

**Russian Federation**

**Grain and Feed**

**Russian Government Resolution on Temporary Export Duties on Wheat and
Barley**

**2007**

**Approved by:**

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

American Embassy

**Prepared by:**

Yelena Vassilieva and Mikael Pyrtel

**Report Highlights:**

In response to rising global grain prices and rising inflationary
pressures, the Russian government issued Resolution Number 660 on
October 10, 2007. The resolution increased wheat export tariffs to 10
percent of customs value, but not less than 22 Euros per metric ton, and
barley export tariffs to 30 percent of customs value, but not less than
70 Euros per metric ton. Export tariffs will enter into force on
November 12, 2007 and will last through April 30, 2008. Grain
interventions will begin at about the same time the tariffs go into
effect. In addition, a reduction of rail tariffs for Siberian-origin
grain is under consideration.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Moscow \[RS1\]

\[RS\]

Table of Contents

[Executive Summary 3](#executive-summary)

[Text of Resolution Number 660 of October 10, 2007
3](#text-of-resolution-number-660-of-october-10-2007)

[Other Measures 4](#other-measures)

[Other Relevant Reports 4](#other-relevant-reports)

# Executive Summary

In response to rising global grain prices and inflationary pressures,
the Russian government issued Resolution Number 660 on October 10, 2007,
under which a wheat export tariff will be set at 10 percent of customs
value, but not less than 0.022 Euros per kilogram. Export tariffs on
barley are set at 30 percent of customs value, but not less than 0.07
Euro per kilogram. The *ad valorem* rates were announced by Minister of
Agriculture Aleksey Gordeyev on October 10 (see GAIN report RS7068 Grain
Export Tariffs Coming in November). The Euro minimum is an additional
restriction on exports, and this minimum tariff will not allow exporters
to beat the tariff by underdeclaring export prices.

Analysts have reported feverish wheat shipments since September as
traders reacted to expectations of pending tariffs on grain exports. The
rapid pace is expected to continue through October and early November as
the resolution provides a one-month grace period for exporters. The new
tariffs will last from November 12, 2007, through April 30, 2008.
However, the Russian government may escalate measures to restrict wheat
exports by early 2008, if the domestic grain market tightens.
Additionally, when the government announces wheat interventions, exports
of intervention-class wheat will be banned through the applicable
period.

The resolution covers exports of wheat and barley from the territory of
the Russian Federation, and the other member countries of the Customs
Union Agreement[^1]. Thus, to implement the resolution requires export
policy coordination among these countries, which may prove problematic.

The government is reportedly considering additional measures, including
reduction of rail tariffs for cartage of Siberian-origin grain, and
release of government grain stocks.

# Text of Resolution Number 660 of October 10, 2007

Begin text:

Government of the Russian Federation

Resolution #660 of October 10, 2007

On Approval of Export Custom Tariffs on Wheat, Meslin, and Barley
exported from the Territories of the Russian Federation and Members of
the Custom's Union Agreement

The Government of the Russian Federation decrees the following:

1.  To approve the attached export tariffs on wheat, meslin and barley,
    exported from the territories of the Russian federation and members
    of the Custom's Union Agreement.

2.  The present resolution enters into force one month after its
    official publication, and will be in force through April 30, 2008.

Chairman of the Government

Of the Russian Federation V. Zubkov

APPROVED\
by the Government\
of the Russian Federation\
of October 10, 2007, #660

RATES

of Export Customs Tariffs on Wheat, Meslin, and Barley, Exported from
the Territories of the Russian Federation and Members of the Custom's
Union Agreement

  ------------------- ------------------ --------------------------------
  Russia's TN VED     Names              Export Customs Tariff\
  codes                                  (percent of customs value or in
                                         Euro)

  1001                Wheat and Meslin   10, but not less than 0.022 Euro
                                         per 1 kg

  1003 00             Barley             30, but not less than 0.07 Euro
                                         per 1 kg
  ------------------- ------------------ --------------------------------

# Other Measures 

On October 16, Gennadiy Kulik, Chairman of the Agrarian Policy Committee
of the State Duma (lower house of parliament), told Russian media the
government will review rail tariffs for grain, since the harvest in
Siberia was greater than expected, but the cost of transporting that
grain to the major population centers of European Russia would "eat up
the profits."

In addition, Minister of Agriculture Gordeyev announced to Russian media
October 16 that grain interventions would get underway in early
November, saying the decisions have already been made and would go into
effect as soon as export tariffs on grain go into effect. Minister
Gordeyev said government intervention stocks total about 1.5 million
metric tons of grain, mainly milling quality wheat, but declined to
speculate on how much would be put on the market.

# Other Relevant Reports

RS7068 Grain Export Tariffs Coming in November

(as of this report's submission, not yet posted to the FAS website)

RS7320 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

[^1]: . Members of the Customs Union Agreement are Russia, Belarus,
    Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan.