Page 140 - RusRPTMay21

world leadership in wheat exports, which the country lost to the E.U. at the end of the 2019–2020 agricultural year. The authority estimates that the wheat exports from the E.U. amounted to 38.429mn tonnes last season, and from Russia to 34.485mn tonnes. This season supplies from the E.U. may amount to 27mn tonnes, it said. The Agriculture Ministry expects Russia’s grain exports at 45mn tonnes in the 2020–2021 agricultural year, including 35mn tonnes of wheat.
The Russian government has prolonged the self-regulation agreements on price caps for sugar and bottled sunflower until 1 June 2021 and 1 October 2021, respectively. This is to keep prices at the same level, which is RUB 36/kg and RUB 95/l in wholesale for sugar and oil, respectively, while retail prices are set at RUB 45/kg and RUB 110/l. A cost subsidy mechanism is to be introduced for sugar (RUB 5/kg) and for bottled sunflower oil the cost of RUB 10/l will be compensated. Both subsidies are to be in effect from 1 April 2021 to 30 September 2021
The government increased export duties on sunflower oil to 50% but no less than $320/t. The new export duty will take effect 1 July and run until 31 August 2022. The current export duty, which expires 30 June, is 30% of the customs value. At the same time, the government will introduce a floating export duty for sunflower oil starting 1 July and running until 31 August 2022. The duty will be equal to 70% of the difference between the base price of $1,000/t and the monthly average market price minus $50/t. The new duties will apply to products shipped outside the Eurasian Economic Union.
The Russian government’s attempts to reign in food price growth are having unintended effects. On March 22, the government announced that it would pay a subsidy to sugar producers that cap prices. For every kilogram of sugar that producers sell to retailers at a fixed price of 36 rubles (47¢), the government will pay them 5 rubles (7¢). The subsidies started today and will remain in place for six months. But the 36-ruble price ceiling has been in place since December 2020. So between the government’s announcement and the day the subsidies started, producers have reportedly stopped selling sugar to retail chains. Grocery stores are unlikely to run out of supplies as they typically have two weeks’ worth of reserves. But analysts are using the episode as evidence of the foolishness of the government’s food price caps. Specialist news site Sugar.ru has calculated that the sugar industry will lose 10bn rubles ($131mn) from the price ceiling, RUB3bn ($39mn) of which the government plans to compensate via subsidies. However, if the government had opted to given poor families money for food as prices rose, it would have only cost the state 1.8bn rubles ($24mn).
140 RUSSIA Country Report May 2021 www.intellinews.com