Russia mulls cancellation of grain export quota on a bumper crop

Russian authorities are considering abolishing the current grains export quota for the 2022/23 marketing year as the country’s wheat crop reached 103 million mt to date, marking a 36% year-on-year increase.

According to Viktoria Abramchenko, Russia’s Deputy Prime Minister, there is no ground to impose an export quota this year, based on a harvest success.

An export quota is usually imposed between February 15 and June 30 to ensure local grain supply based on stocks, with the 2021/22 volume set at 11 million mt, including 8 million mt of wheat.

Nevertheless, Eduard Zernin from the Russian Union of Grain Exporters proposed to keep the quota and set it at 25 million mt - a measure that will not bring drastic changes to the export potential but will remain a restrictive measurement.

Market representatives were quite skeptical about the potential change, claiming it will have limited impact on grain exports, while farmers and exporters still have to deal with the strong ruble on international currency markets, a floating export tax and inflated freight costs.

“The quota is normally about the same volume the country exports during the period, so it is never a major restricting factor,” Andrey Sizov said in his note to clients.