MOSCOW: Russia’s wheat export tax may end up weakening its hold on trade in the crop – but potentially lead to it becoming a more influential in grain markets overall, as farmers switch to corn.
Jack Watts, the lead analyst in cereals and oilseeds for the UK’s AHBD agriculture bureau, said that the Russia’s wheat export tax could – long-term – prompt a “shut down” in Russian production and exports of the grain, under certain market conditions.
“Russia’s influence as a supplier of the grain to the world would decline,” as the prospect to farmers of lower rewards from wheat prompts farmers to turn away from the crop, Mr Watts told Agrimoney.com.
However, much of the area lost to wheat would likely be switched to corn – so turning Russia into a growing force in a global feed market in which, up to now, the country has been a small player.
Russia’s corn exports for 2014-15 totalled 2.9m tonnes, a fraction of the 20.0m tonnes shipped by neighbouring Ukraine, or indeed the 50.7m tonnes exported by the US, according to US Department of Agriculture data.
