- Russia has introduced customs duties on flax and limits on corn trade in order to strengthen domestic processing and stabilise the internal market.
- Farmers warn that the new regulations will mean higher costs and difficulties in foreign sales.
- Trading partners are beginning to look for alternative sources of supply.
- The changes may translate into higher prices for feed and oilseeds in the coming season.
Flax under duty
Russia has announced the introduction of a new export duty on flax, to remain in place for an initial period of several months. The government explains the decision by the desire to strengthen domestic processing and to limit sales of the raw material outside the country. The measure is intended to support the development of local production and increase the share of Russian industry in the creation of finished agricultural products.
The introduction of the duty may hinder trade and weaken the position of Russian flax on international markets, but at the same time increase the availability of raw material for local processors. In the long term, this approach may favour the development of the domestic oil sector and change the structure of Russian exports.
New corn export regulations
The government has introduced limits on maize exports from internal production regions to secure supplies for domestic feed producers. The changes are intended to maintain a balance between supply and market demand, but for some farmers they may mean a reduction in their ability to sell surpluses abroad.
Although the Kremlin’s aim is to strengthen the domestic market, withholding exports could upset the balance of international trade in the long term. Limited supply from Russia may prompt importers to seek new suppliers, which will affect the balance of power in the market in the coming season.
