Oct 17, 20161 min read

Russia Cuts Wheat Export Duty to Zero for Two Years

Russia has temporarily reduced its wheat export duty beginning September 23 and lasting through July 1, 2018, according to the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS).

Russia can expect total grain exports of 37 million tons for the 2016/17 marketing year as the country is forecast to see an increase in its wheat exports from 24.5 million tons to 28 million tons after the amount of wheat harvested as of August 30 reached 62.03 million tons – 32 percent more than at the same point a year before.

This increase in output prompted Russian traders and Russia’s Minister of Agriculture to request on September 2 that the government waive the export duty on wheat –a request that Prime Minister, Dmitry Medvedev granted for two years.

It is hoped that the reduction of the duty to zero will spark growth in Russia’s grain exports while also giving traders incentives to conclude existing futures contracts. However, the Prime Minister noted that in the case of a possible force majeure the export duty will be reinstated.