Russia confirms new crop export taxes.

Following Russia’s 🇷🇺 move to impose tariffs on old crop wheat exports, a decision has been made to apply a ‘floating’ tax rate on new crop wheat exports. The new crop tariff, which comes into effect on 2nd June, will vary according to market circumstances (when/if the FOB price is above $200, then the difference will be taxed at 70%). This was largely anticipated by the market and we consider it bearish for old crop wheat prices, as Russian farmers are being disincentivesed to store grain into the new season (20021/22). Conversely, we consider this news as potentially bullish for new crop prices, as history confirms, any Russian state intervention, on a policy front, is known to restrict trade.