Bloomberg News

Russia Will Tax Grain Exports to Cap Shipments, Putin Says

October 25, 2011

(Updates with estimated exports in second paragraph.)

Oct. 25 (Bloomberg) -- Russia, which barred grain exports last year because of a drought, will impose a tax in an effort to limit shipments, Prime Minister Vladimir Putin said.

“Exports will be about 24 million to 25 million tons,” he said today in the southern Russian city of Stavropol. “After that, we will introduce certain restrictions not to leave the country without bread and to have reserves. Those who export should hear today that they should not sign excessive contracts for exports.”

Russia’s grain crop plunged 37 percent to 60.9 million metric tons last year because of the country’s worst drought in half a century. The ban was imposed in August of last year and expired July 1 as scheduled. First Deputy Prime Minister Viktor Zubkov said this month a tax might be imposed once the season’s exports reach 23 million to 24 million tons.

This year’s harvest may exceed 95 million tons in bunker weight, according to Agriculture Ministry data based on reaping of 96 percent of sown areas. Bunker weight is measured before grain is dried and cleaned.

The government plans to purchase grain from farmers at auctions that will give them the right to repurchase the cereals at the same price at a later date, Putin said.

--With assistance from Marina Sysoyeva in Moscow. Editors: Dan Weeks, Nicholas Larkin.

To contact the reporter on this story: Ilya Arkhipov in Moscow at iarkhipov@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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