Russia: to impose subsidies for grain exports

Moscow / RU. (ami) On August 31, Russian grain union addressed to the government of the Russian Federation for supporting of grain market operators in the form of export subsidies. According to Arcadiy Zlochevskiy, the government should impose export subsidies in order to strengthen the opportunity to use such measures after entrance to the World Trade Organization. Russia should strengthen the sum of 700 million USD for export subsidy assistance, which Russia previously offered in own negotiated positions.

To date, over 60 countries purchase Russian grains, including Egypt, Saudi Arabia, Tunisia, Algeria, Israel, Spain, Greece, Italy, and the geography of export deliveries continues widening. Last year, when Russia harvested large-scale grain harvest of over 100 million tonnes, the government discussed the possibility of imposing subsidies for grain exports. Market operators, purchasing four-grade wheat from grain producers at the exchange market at the price of over four thousand RUB per tonne, should have received the subsidies.

The government provided ten billion RUB for supporting of exports of ten million tonnes of grains. But fluctuations of the exchange rate of RUB made the operation profitable, and grain supplies on foreign market totaled 22 million tonnes. Thus summer, grain prices started falling. In July, the export price for milling wheat varied within the range of 155 to 165 USD per tonne as opposed to 250 to 300 USD per tonne last year. The purchasing price also decreased from six thousand RUB per tonne to 3,5 to 4,0 thousand RUB per tonne.

According to Zlochevskiy, grain exports became loss-making. If the government does not support exports, in the current year, Russian grain supplies on the foreign market will total 15 to 16 million tonnes. If the market situation changes, the index will total 20 million tonnes (source: agrimarket.info).