World meat industry news

SovEcon cut its forecast of Russian wheat export in 2020/21 MY by 4.5 mln tonnes to 36.3 mln tonnes. The analysts expect farmers to postpone selling of wheat until the next season due to the implementation of export duty on the grain since February 15, 2021.

“Initially we expected the duty at 25 EUR/t to cut wheat export by 2-3 mln tonnes compared to our November forecast (40.8 mln tonnes). However, the analysis of 2014/15 MY shows that the market may have stronger reaction on the duty”, - the experts suppose.

SovEcon reminds that in February-May of 2015 we saw the decline of monthly wheat export to 0.4-0.6 mln tonnes from about 2 mln tonnes in November 2014 - January 2015. At the same time, the duty free export of corn and barley increased. The duty on wheat export was 15% and 7.5 EUR/t but not less than 35 EUR/t from February 1, 2015.

To stabilized inner prices, the government of Russia has implemented the tariff quota on export of grains and export duty on wheat for the period from February 15 to June 30, 2021. The tariff quota on wheat, rye, barley and corn is set in the amount of 17.5 mln tonnes and should be allocated among exporters by historical principle. In-quota duty on wheat export is set at 25 EUR/t, on rye, barley and corn export it is set at 0%. The export of grains in the volume exceeding the quota will be subject to export duty in the amount of 50% of the customs value but not less than 100 EUR/t.

The experts suppose that many farmers will prefer to delay the selling until the next season in the hope of sharp appreciation of wheat after the cancellation of the duty. Besides, quite pessimistic expectations regarding the next crop may support the prices as well.