Russia cuts wheat export duty to zero in major policy shift
This marks the first time the duty has been eliminated since it was introduced in 2021.
RUSSIA – Russia, the world’s leading wheat exporter, has officially removed its wheat export tax, setting the rate to zero effective July 9, according to a report by the Interfax news agency citing the country’s agriculture ministry.
This marks the first time the duty has been eliminated since it was introduced in 2021.
The wheat export tax was established to shield the domestic market from price volatility and discourage excessive shipments abroad that could lead to local supply shortages.
Its calculation was based on a floating mechanism: 70% of the difference between a weekly indicative price and a base price determined by the Russian agriculture ministry. A higher base price typically resulted in a lower export duty.
As of July 4, the indicative price was recorded at US$228.70 per ton, and based on the ministry’s formula, the duty has been reduced to zero. Earlier this year, in January, the export tax had reached its highest level at 4,699.6 rubles (US$59.87) per ton, reflecting tighter market conditions and stronger international prices.
Russian grain producers have consistently raised concerns over the export duty, arguing that it eats into profit margins and discourages investment in wheat production. They have also criticized the limited reinvestment of collected duty revenues into the farming sector.
“The tax harms the profitability of wheat farming and only a small portion of the collected funds are returned to the sector,” industry representatives have stated.
The move to eliminate the export tax comes amid expectations of a robust 2025 wheat harvest, supported by favorable weather in key producing regions.
According to the industry analysts, the policy shift could boost Russian wheat exports during the post-harvest period, increasing competition in global markets and potentially putting further pressure on prices, which have remained subdued in recent months.
Russia’s wheat exports have been a significant force in shaping global grain flows, particularly across the Middle East, North Africa, and Asia. In recent years, the country has shipped more than 45 million metric tons of wheat annually. The removal of the duty could now further enhance Russia’s price competitiveness in these regions.
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