Russia mulls soybean export tax reduction as global grain stocks to drop to five-year low

RUSSIA — Russia is examining a 20% reduction of its soybean export tax, but not to less than US$100 per tonne, starting July 1, Reuters reported.

If approved, the tax would replace the current export tax which set at 30% with a minimum level of €165 ($199) per tonne until June 30, and is expected to be in place until September 2022.

The tax reduction comes at a time when global grain stocks are forecast to finish the 2020-21 marketing year at a five-year low at 609 million tonnes, according to the International Grains Council’s (IGC) most recent Grain Market Report released on April 29.

The decline in total grain stocks is attributed to a net rise in grain consumption, led by a 20-million-tonne increase in wheat demand.

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The IGC said that despite total grain production being forecasted to rise by 36 million tonnes, a net grain consumption of 44-million-tonnes will offset any gains that would have been achieved by increased output, leaving stocks 8 million tonnes lower than a year ago.

“The drop in stocks is mainly because of another drawdown of maize, to the least in eight years, which contrasts with a buildup for wheat to a record,” the IGC said.

The IGC projects wheat stocks to increase to 289 million tonnes from 278 million in 2019-20, while maize stocks are forecast to decline by 26 million tonnes despite an increase in production from 1.12 million tonnes to 1.14 million.

Largely tied to a production upgrade in Brazil, global soybean output in 2020-21 was forecast up 1% month-on-month, to 362 million tonnes, which is 7% higher than a year ago.

“Nevertheless, with an expected solid increase in consumption, stocks of soybean are seen falling for the second consecutive season, including US carryovers contracting by 80% year-on-year,” the IGC said.

World rice production in 2020-21 is estimated at a record-high 504 million tonnes, mainly driven by larger crop outputs in Asia.

Utilization of the crop is however projected to reach 504 million tonnes, resulting in marginal tightening inventories, according to the IGC.

With strong gains for all the components other than rice, the IGC Grains and Oilseeds Index (GOI), which measures average prices, rose by 8% from last month to 285, a 54% increase year-to-year and its highest level since 2013.

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The IGC said the eight-year high GOI comes “as weather worries and tightening supply outlooks sparked solid gains in maize, wheat, soybean and barley prices.”

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