Putin warns of higher export duties on grain

AP News
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Posted: Oct 25, 2011 1:12 PM
Putin warns of higher export duties on grain

Prime Minister Vladimir Putin said Tuesday that export duties on Russian grain will increase if exporters sell more than 25 million tons during a 12-month period ending in July 2012.

Russia, a major grain exporter, is still recovering from a severe drought in the summer of 2010 when exports were banned in an effort to keep bread prices from skyrocketing. That ban helped drive up world grain prices.

The ban was lifted last July, and Putin said Tuesday the potential increase in export duties is designed to prevent a new surge in grain and bread prices within Russia.

Russia exported 21.4 million tons of grain in 2009. After decades of stagnation, Russian agriculture has seen an unprecedented boom in recent years, fueled by private investment and state subsidies.

Putin spoke while visiting a farm in the southern Stavropol region with President Dmitry Medvedev. They were shown on national TV driving two combine harvesters through fields of corn, then dumping the corn into a truck.

The two leaders have made several public appearances together since Medvedev announced last month that he would not run for another term but would support Putin in the March presidential vote. Putin had stepped down as president in 2008 because of term limits and chosen Medvedev to succeed him.

Putin said while meeting with farmers that Russian exporters were expected to ship up to 25 million tons in the 12 months ending in July 2012 and that Russia's government will levy the higher export duty if that amount is exceeded. He didn't say how much the duty would be raised.

"Exporters should hear me today and refrain from signing too many export contracts," he said.

Earlier, Putin's deputy, Viktor Zubkovm, said Russia has exported at least 11 million tons of grain since the ban was lifted and is expected to sell a total of 24 million tons by next July.