Traders expect Russia grain export tax from October-survey
* Export controls to be imposed in October or November
* Russia's WTO membership makes export ban less likely
* Export tax seen by many as most likely option
By Nigel Hunt
LONDON, Aug 30 (Reuters) - Drought-hit Russia is expected to restrict grain exports as estimates of the weather-ravaged crop have now slipped below levels seen after its 2010 crop disaster, with punitive tax a likely option as soon as October, according to a survey of international grain traders conducted by Reuters.
Of 10 international traders and analysts surveyed, five saw an export tax as likely with other possibilities including quotas or even an outright ban. Six of the 10 expected export curbs to begin in October.
A sharply lower 2012 grain crop estimate, recently cut by the government to 75 million tonnes, stirred concern Moscow might ban exports and stoked a global price rally.
At the same time, officials have repeatedly said there would be no export ban, with domestic analysts expecting no abrupt decisions and recent formal membership of the World Trade Organisation (WTO) making such a move tricky.
While few believe the key global wheat exporter would impose an outright ban as it did two years ago, fuelling a price surge and hurting major customers like Egypt, traders are convinced Russia will impose either an export tax or quotas.
"They sullied their credibility in 2010 by dumping buyers so now I think they will try to stick to the cleanest possible tool they have," one international trader said, arguing an export tax was the most likely option.
"A ban is to be excluded as it would disqualify the origin. You can do it once but if you do it twice the market will think you can't be relied on," the trader added.
Russia barred grain exports for almost a year in August 2010 after a severe drought which led to a wheat crop of just 41.5 million tonnes.
Forecasts indicate it could be even smaller this season with Russian analyst SovEcon on Thursday forecasting the crop at just 38 million tonnes.
"The question of a move on exports is not if but when," said James Dunsterville, head analyst at Geneva-based consultancy Agrinews.
"My favourite guess would be that they will introduce quotas that could not be filled, which would be equivalent to a ban," he said. "They could limit the quotas to Russian companies and tell them not to export anything."
He said an export tax that would be so high that it will be impossible to use was also conceivable.
Russia's recent admission to the WTO could make the decision more politically sensitive even if there are no legal prohibitions preventing export controls.
"I think that now they have joined the WTO the only thing they can do is a tax. Even if they could legally do everything they want, politically it would be the only thing admissible," another major international exporter said.
"Quotas would be hard to sell."
A third international trader took a similar stance.
"There will be no ban. There may be export duties, the betting money is on these being introduced in October," the trader said.
Russian Deputy Prime Minister Arkady Dvorkovich, who coordinates farm policy, will discuss prospects for the drought-hit harvest with Agriculture Minister Nikolai Fyodorov on Friday.
Some traders argued that restriction may not be imposed until November.
"I do not expect any restrictions until November. I think the meeting this week will again result in some sort of announcement that the situation is being monitored," one international trader said.
Another trader agreed.
"I do not expect any export restrictions before November. I think there will be heavy export selling of Russian wheat in the coming weeks as importers seek to take delivery of as much as possible of the cheaper Russian supplies before any export stop is imposed," the second trader commented. (Additional reporting by Sarah McFarlane in London, Sybille de La Hamaide in Paris and Michael Hogan in Hamburg, writing by Nigel Hunt and Veronica Brown; Editing by David Cowell)
- Tweet this
- Share this
- Digg this