Miller Magazine Issue: 136 April 2021

84 MILLER / aprıl 2021 INTERVIEW Export duty on Russian wheat has been doubled to €50 ($60.44) per ton from March 1. It will remain in force until a permanent floating tax is imposed in June. The levy was introduced in February in a bid to protect do- mestic supply and stabilize the prices for flour and bread and will be applied for certain grains under an export lim- it of 17.5 million tons for the remainder of the marketing year during the current season. While these measures caused a price shockwave through the grain markets, the Russian government’s decision to impose a floating wheat export tax from July 1 made the markets more un- easy. Under the floating tax system, the base price indicator for wheat has been fixed at $200 per ton, so it will kick in only if the calculated market benchmark price is above the $200-per-ton threshold. According to the govern- ment, the scheme will minimize the negative impact of the price fluctuations seen globally on Russia’s domestic market. However, the new tax mechanism caused heated discussions in the grain market. The market speculates on the impacts of the recent restrictive export measure. In an interview with Miller Magazine, Eduard Zernin, Chairman of the Russian Union of Grain Exporters, gives insights into Russian grain trade policies. Mr. Zernin, first of all, I want to thank you for ac- cepting our interview request. Could you please tell us about your background? How did you get into the agribusiness? Despite my surname, which in Russian is consonant with the word «grain», I am an investment banker by origin, who received professional certification in 1993 “The floating grain export duty is perhaps the most controversial measure of recent times that has had a significant impact on the global market. We see it as our task to limit the application of the floating duty to the new season, or rather to the 2021 calendar year. I do not think that its zeroing is possible earlier than the 4th quarter of 2021. If we restrict ourselves to 2021, then the losses of the farming sector from falling prices will be localized and will not affect production plans and crop rotation in 2022. For the world market, the effect of the floating duty will reduce the supply from Russia. The level of world prices will depend on the situation with the new harvest and grain supply from the EU and Ukraine, our traditional competitors.” ‘We have to work hard to achieve the zeroing of the duty by the end of 2021’ Interview: Namık Kemal Parlak Eduard Zernin Chairman of the Russian Union of Grain Exporters RUSGRAIN UNION