Miller Magazine Issue: 136 April 2021

88 MILLER / aprıl 2021 INTERVIEW Russia sets a floating tax system for grain exports to come into force from June 2021, following a wheat ex- port tax and a grain export quota in December 2020. How have these measures affected the pace of the Russian wheat exports? How will the new tax system change the wheat market in the short and long term? The floating grain export duty is perhaps the most con- troversial measure of recent times that has had a sig- nificant impact on the global market. To understand the situation, it is not enough to express your position on this issue. It is undoubtedly negative, as with any market par- ticipants and near-market "experts". However, express- ing your negativity will definitely not solve the problem. In general, I do not like protests and see in them rather a demonstration of the inability to think flexibly and find a compromise. And in order to find a compromise, it is necessary to understand the nature of the introduced export restrictions. The current season is characterized by an exuberant demand for Russian grain due to a shortage in the world market. Af- ter the actual withdrawal from the EU and Ukrainian markets due to a poor harvest, Russia remained virtu- ally the only supplier of grain of the Black Sea origin both at the key ten- ders GASC and TMO, as well as at other public and private tenders for the purchase of wheat and barley. In addition, such a large buyer as Paki- stan entered the market, again due to a poor harvest. In parallel, China began to in- crease its national grain reserves. And although Russia practi- cally does not supply grain to China (it is possible to carry out supplies only from 7 bor- der regions, which do not dif- fer in high yields and are re- mote from ports), the Chinese increased demand attracted volumes from the countries of North and South America, which could become an alter- native to the Russian grain. As a result of the above, the pace of export and the price of grain from Russia jumped sharply, which turned out to be a complete surprise for consumers within the country - millers and livestock breeders. Many of them, against the background of forecasts of a high harvest, were in no hurry to purchase and form stocks of raw materi- als. Therefore, they were shocked by the rate of price growth and their inability to compete on market terms with exporters. In this situation, they preferred to apply to the Government with a request to impose export re- strictions to reduce domestic grain prices. By that time, the government had already seen an upward price trend for key foods, which could not but worry it. The decision was made quickly. RUSGRAIN UNION was the only one to oppose the export restriction proposal. It's funny, but true, some of today's critics of the duty, at the time of the decision, worked on the side of the initiators, helping them with argumentation. Probably, they absolutely did not realize what measures the Government was ready to take in order to ensure the country's food security. The fact remains. The decision to impose a duty on grain exports was made. We managed to protect the