Russian wheat exports

Farm and Ranch March 22, 2010 Russian subsidies for wheat exports are more concerning for U.S. Wheat Associates President Alan Tracy than the creation of a Russian state export trading enterprise. Tracy says the Russian government recently authorized the equivalent of 170-million dollars to make up the difference between the high internal support price, or intervention price, at which the government company buys wheat and the price it can export it for.

Tracy: “Now that is a direct export subsidy. And we finally get the Europeans to agree, at least if we ever get a WTO agreement they will have agreed, but within that discussion they have agreed to stop direct export subsidies, which is the most trade distorting of all types of subsidies. And yet here are the Russians about to pick it up. So that is certainly discouraging. Russia is not a WTO member. They want to become a WTO member. I think it is all the more important that we get the language we fought so hard to get in the current Doha agreement, which will eliminate the monopoly pricing of the power of the export state trading enterprises worldwide.”

A Russian official recently talked about plans to build export facilities in eastern Russia through which the country could export grain into Asian markets like Japan. During a video conference with the Washington Grain Commission last week U.S. Wheat Associates Vice President of Oversea Operations Vince Peterson, said a lot of that talk out of Russia is political hype with any such development a long way off. Peterson also doubted that the poor quality of Russian wheat would pass muster in sophisticated markets like Japan.

I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on the Northwest Ag Information Network.