Russia announced a 30% tariff on soybean exports as the government moves to cool food price inflation. This move follows other export restrictions revealed by Moscow earlier this month.
Previous restrictions included a Dec. 14 announcement of an export quota on grains and an export tax on wheat, both to take effect next spring. Russia is one of the world’s largest producers and exporters of wheat. The country also announced on Dec. 10 a 30% tariff on exports of sunflower seeds and rapeseeds, starting from Jan. 9.
Russia exports less than 1 million tonnes of soybeans a year, so the impact of the latest tariff on actual global balance sheets will be negligible. Although Russia is a very small bean producer (4.4 million tonnes last year), nearly all of its soybean exports typically go to China. While Russian soybean exports to China are small compared to other origins, global supply needs to increase not contract, given heightened demand. The Russian soybean export tariff of 30% will impose a minimum charge of 165 euros/tonne (US$201/tonne) and will run from Feb. 1 to June 30.
Russia’s strategic moves could be a warning sign of things to come as countries worldwide contend with soaring grain prices. Global demand for animal feed remains high, driven by China. And there are widespread concerns over reduced production, specifically, Brazil and Argentina soybean and corn, Argentina wheat, US winter wheat, and Ukraine corn and wheat. Those factors have combined to make export markets more attractive for farmers in many countries and drive domestic prices upward. National governments then come under pressure to combat food inflation, and consider or implement export controls.
Similarly, high domestic grain prices in the wake of the coronavirus outbreak last spring prompted several governments to restrict exports. Russia’s latest announcement limiting soybean exports could signal additional moves by other countries to protect their domestic markets.
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