Wheat rose to a six-year high in Chicago after top exporter Russia said it is ratcheting up efforts to cool domestic food inflation by curbing grain exports.
Russia on Friday said that a new duty on shipments would rise even more than expected, just a few weeks after being imposed in the middle of next month, and taxes would continue at some level after the current season ends in June.
The government had announced an initial tax last month, alongside a grain-export quota, after Russian President Vladimir Putin demanded action following sharp increases in prices for pantry staples.
Photo: Reuters
The Russian measures, combined with tightening supply elsewhere and surging Chinese demand, have already helped drive global grains prices to multiyear highs. That is stoking worries over global food inflation at a time when hunger is surging around the world due to the COVID-19 pandemic.
Russia’s wheat duty is to double to 45.36 euros (US$54.79) a tonne on March 1, the Russian Ministry of Economic Development said in a statement.
Earlier this week, the Ministry of Agriculture proposed an increase to 40.82 euros a tonne from March 15.
Levies on corn and barley would also come into force from mid-March.
While other wheat shippers such as Australia have had bumper harvests, Russia plays a vital role in global supply and its grain would still be needed in the latter part of the season, said Andree Defois, president of consultant Strategie Grains.
Chicago wheat futures reached the highest since 2014 after the government announcement and Paris milling-wheat is set for the biggest weekly gain in four years.
That puts extra pressure on big importers such as Egypt, which purchases large amounts of wheat from Russia each year because its prices tend to be cheaper than most other sources.
“If the world could afford to go without Russian wheat, it wouldn’t be a problem,” Defois said, adding that importers would try to postpone purchases, but “they still need to buy for nearby positions.”
Analysts also previously speculated that the protectionist measures could prompt Russian farmers to delay sales until the curbs were lifted at the end of the season — putting more pressure on shrinking global supplies.
Consultant SovEcon last month cut its estimate for exports this season by 11 percent.
However, the Russian government made it clear that duties would remain in place for the long-term.
“There is no sense in holding the grain and waiting,” Russian Minister of Economic Development Maxim Reshetnikov said in the statement.
Eduard Zernin, head of the Russian grain exporters union, said that the increased tax would likely be absorbed by export markets and partly by the domestic one.
The group is seeking talks with the government on how to set a formula for duties on shipments from July 1, so that traders can have more predictability.
“I don’t think the traders’ exports will be seriously adjusted from the plans,” he said. “The global market remains in high demand for our grain.”
Other commodities:
‧ Spot gold dropped 1.1 percent to US$1,826.59 an ounce, down 1.21 percent for the week, while silver fell 3.11 percent to US$24.74, a weekly decline of 2.69 percent.
Additional reporting by Reuters
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last