Russia is getting ready to ramp up wheat exports as inflation stabilizes and the government prepares to end a tax on shipments.
Traders may export 1.2 million tons through the end of the season on June 30, according to Igor Pavensky, deputy director of the marketing department at ZAO Rusagrotrans, which carries grain by rail. Monthly shipments averaged 516,000 tons in February and March.
“It’s a serious volume,” Pavensky said by phone from Moscow. More exports will “remove some pressure from prices for the crop in the next season,” he said.
Slowing inflation and the rising ruble have helped stabilize Russia’s economy, giving the government room to ease restrictions designed to rein in soaring food prices during last year’s crisis. The country’s energy-driven economy is heading for its first recession in six years following a slump in oil prices and international sanctions over the conflict in Ukraine.
While the tax was originally supposed to run from February through July 1, the Agriculture Ministry has said it should end May 15. Every wheat shipment incurred a tax of 15 percent, plus 7.50 euros ($8.55) a ton, causing exports to fall by more than half during February and March.
Speculation that more wheat will enter the market has hurt prices, sending contracts on the Chicago Board of Trade to an almost five-year low earlier this month. Futures for July delivery traded at $5.03 a bushel on Thursday.
For the whole season, Russia will probably sell 21.9 million tons of wheat overseas, according to Pavensky. Data from the Agriculture Ministry show about 20 million tons have been shipped as of May 6. Russia also sold 700,000 tons to Kazakhstan, a number that the government data doesn’t include, Pavensky said.
Even after the sales, Russia will probably be left with a record stockpile of wheat. The inventory will be at 7.4 million tons for 2015, compared with an average level of 5.5 million tons, Pavensky said.