Russia Sets an Additional Quota for Grain Export
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An additional quota for Grain export from the Russian Federation has been formed in the amount of 814 thousand tons, according to the order of the Ministry of Agriculture. The quota was formed based on exporters’ statements about reducing their previously received shares in the total quota. The total quota provided for the period from February 15 to June 30, 2023, at 25.5 million tons, has not changed. As reported, the Government adopted a resolution in which the Grain export quota will be divided into primary and additional parts.
As Minister of Agriculture Dmitry Patrushev said on the sidelines of the St. Petersburg International Economic Forum, the decision was made to optimize the mechanism for export quotas and maximize the use of quotas. It provides for the possibility of voluntary renunciation of tariff quotas or part thereof, a reduction factor provided for the following periods and distribution of an additional amount of the quota.
“The waiver of tariff quotas allows exporters to voluntarily reduce their quota if they believe that the volumes allocated to them are excessive and they will not be able to master them before the start of the next season fully,” he explained. In subsequent years, applications for quota waivers will be accepted from April 1 to April 20, and the final decision on reducing quotas will be made before May 1.
“The main part of the tariff quota will be distributed, as before, according to the historical principle before the start of the quota period. At the same time, from next year, a reduction coefficient equal to the percentage of the quota sample in the previous period will be calculated for each exporter,” Patrushev said. A company this year will choose 90% of the volume allocated to it; in 2024, it will proportionally receive 10% less.
According to him, starting from 2024, the additional volume of the quota will consist of three parts: 10% of the total quota plus the volume “released” due to the application of the reduction factor and the volume formed from refusals. As the minister clarified, exporters who have been allocated the main part of the tariff quota historically can apply for an additional part. “Together with the Ministry of Industry and Trade, we will evaluate the unlicensed balance of the main part of the quota of each exporter at the time of application, and based on this balance and the volume specified in the export contract, the additional part will be distributed following the calculated need,” he added.
Russian Grain Export
Suppose an exporter has to supply 100 thousand tons of Grain under an export contract and retains the unlicensed balance of the main part of the quota in the amount of 50 thousand tons. In that case, he will receive an additional part of 50 thousand tons. At the same time, the extra part of the tariff quota cannot exceed 45% of the volume of the main part of the quota distributed to the applicant in the current season.
The Russian Federation began to quote Grain exports in 2020. Restrictions were introduced from April 1 to June 30 and amounted to 7 million tons. From February 15 to June 30, 2021, a new quota was in effect; its volume amounted to 17.5 million tons. In 2022, the quota was 11 million tons, including 8 million tons of Wheat. In 2023, the quota will be 25.5 million tons. It does not apply to the countries of the EAEU. According to the AgFlow data, Russia exported 0.9 million tons of Barley in Jan-May 2023. In May, the key markets were Libya (0.1 million tons), Turkey (71,812 tons), Tunisia (27,500 tons), and Senegal (27,360 tons).
Other sources: ZERNO
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