March 12, 2020 / 2:55 PM / 19 days ago

UPDATE 1-Russia says no need for grain export duty despite weak rouble

(Adds details, quotes, context)

By Polina Devitt

MOSCOW, March 12 (Reuters) - Russia, the world’s largest wheat exporter, sees no need to trigger a grain export duty, which is currently at zero, after sharp falls in the rouble, the agriculture ministry said.

The Russian currency’s rapid decline sparked concerns among some analysts that rouble-denominated grain prices would rise and prompt officials to consider launching official or non-official measures to slow down exports and put a break on rising costs for flour millers or meat producers.

But in its first public comment since the collapse in global oil prices and the coronavirus pandemic pushed the rouble to four-year lows against the dollar, the ministry said on Thursday there was no need for an immediate response.

“The agriculture ministry does not expect a significant growth in the grain prices on the domestic market and does not see the need to change a zero export duty,” it said.

Russia’s domestic market was relatively stable last week and the data for this week will be available on Monday.

“At the moment there are no restrictions prescribed on supply to foreign markets,” the ministry said in a statement, adding that since the start of the 2019/20 marketing year on July 1 and by early March, Russia exported 30 million tonnes of grain, less than in the same period a year ago.

Taking into account the ministry’s official forecast for Russia’s exports this season of 45 million tonnes, the country can export additional 15 million tonnes of grain in March-June without drawing on grain needed for domestic consumption.

Most analysts and the ministry have said that this amount of supply is unlikely to be exceeded as if Russia were to do this it would have to be exporting 3.8 million tonnes a month in March-June, while current estimates are significantly lower.

For March, Russia’s grain exports are expected at 2.1 million tonnes, the SovEcon agriculture consultancy said earlier this week. (Reporting by Polina Devitt; editing by Alexander Smith)

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