MOSCOW, RUSSIA — The Russian government on July 1 announced that it is extending the term of the zero rate on wheat exports until July 1, 2021.
The zero wheat export duty, introduced in Russia three years ago, was valid until July 1, 2018, with a subsequent extension until July 1, 2019.
According to a decree posted on the official government website: “The decision will facilitate the export of produce of the agro-industrial sector.”
Russia’s Agriculture Minister Dmitry Patrushev said in June there were no reasons to abolish the zero-duty rate on wheat exports while the situation on the market was stable.
In 2016, Russia became the world leader in wheat exports. The country’s share of the global wheat market has quadrupled since the early 2000s.
Overall, Russian agricultural production surged by 20% over the past five years.
Russia’s wheat exports have been revised downward in the 2019-20 season due to partial droughts, according to Reuters.
Forecasting agencies IKAR and SovEkon both revised their estimates for the crop downward, which means Russia may lose its title as the world’s largest grain exporter to Ukraine.
IKAR lowered its wheat export outlook by 500,000 tonnes to 36.5 million tonnes, and total grain exports by 1.4 million tonnes to 46 million tonnes. SovEkon revised wheat and total grain export outlooks down by 600,000 and 500,000 tonnes to 37.6 million and 48.9 million tonnes, respectively.
Still, total wheat exports are expected to surpass the 34.2 million tonnes exported in 2018. Total wheat harvest for 2019 is estimated at 80 million tonnes by IKAR and 82.2 million tonnes by SovEkon, compared to 72 million tonnes in 2018.
However, Ukraine could surpass Russia in exports as it is on track to export 49 million tonnes of grain this season.