Penne dreadful

22 December 2020 By Dasha Afanasieva Follow @dasha_reuters

Fiscal conservatism and administrative issues make it tricky for Moscow to support citizens via European-style furloughs. Its Plan B, a levy on wheat exports, is supposed to limit domestic food price inflation. But in doing so it will probably undermine a key Russian industry.

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Russian Prime Minister Mikhail Mishustin signed a list of orders aimed at stabilising food prices on Dec. 15, including a grain export quota and a wheat export tax, after President Vladimir Putin criticised food price inflation.

Putin said on Dec. 13 that the price of pasta had jumped 10.5% over a time period he left unspecified, and ordered ministers to resolve the problem of rising food prices within a week.

Russia, the world’s largest wheat exporter, will introduce a quota for overseas shipments of wheat, rye, barley and corn (maize), limiting exports to 17.5 million tonnes for the period between Feb. 15 and June 30, the government said in the statement.

The country, which supplies wheat to major importers such as Turkey, Egypt and Bangladesh, has also decided to introduce a wheat export tax of 25 euros ($30.40) per tonne within that quota for between Feb. 15 and June 30.

The most active wheat futures were down 0.8% at $6.06-1/2 a bushel on Dec. 22, after closing up 0.5% on Dec. 21.

Context News

Putin said on Dec. 13 that the price of pasta had jumped 10.5% over a time period he left unspecified, and ordered ministers to resolve the problem of rising food prices within a week.

The most active wheat futures were down 0.8% at $6.06-1/2 a bushel on Dec. 22, after closing up 0.5% on Dec. 21.

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