Exporters Suspend Purchase Of Russian Wheat Due To High Export Fees - Reports

Mohammad Ali (@ChaudhryMAli88) Published April 13, 2021 | 02:52 PM

Large companies have halted the purchase of Russian wheat for export as they are not ready to absorb high export fees and are waiting for prices to go down ahead of the harvest, as Russian newspaper "Kommersant" reported on Tuesday

MOSCOW (UrduPoint News / Sputnik - 13th April, 2021) Large companies have halted the purchase of Russian wheat for export as they are not ready to absorb high export fees and are waiting for prices to go down ahead of the harvest, as Russian newspaper "Kommersant" reported on Tuesday.

In December 2020, the Russian government adopted measures to stop rising food prices in the country and set quotas and fees for grain export. From February 15 to June 30, 2021, companies can export only 17.5 million tonnes of grain from Russia. In addition, since February 15 wheat exporters have had to pay $29 per tonne within the quota. On March 1, the fee went up to $59.5 per tonne.

Such companies as Louis Dreyfus, KZP, Bunge, Sierentz Global Merchants, Cargill and Gemcorp have stopped buying Russian wheat, sources in the industry told the news outlet.

The media also cited Russian agricultural expert Dmitry Rylko as saying that only Russia's state United Grain Company and "a couple of other players" have continued buying wheat under existing conditions.

Edouard Zernin, the chief of Russia's union of wheat exporters, said, as cited by the newspaper, that most exporters do not hurry to purchase wheat as producers and resellers wait until the fee is canceled. The decision to wait will provoke a sharp correction in prices when the time comes to free grain elevators for a new harvest, he added.

According to Sovecon data, average prices for Russian wheat with 12.5 percent protein decreased by $4 last week to $244 per tonne. Experts said that in June the export fee will go down to $21 per tonne with a price of $230 per tonne. Although this will make the market more attractive, the situation could be risky, as exporters would not have enough time to purchase wheat.