Russia May Impose Grain Export Duty if Wheat Price Hits $233 Per Ton

Russia may impose grain export duties, if wheat prices soar to 6,500 rubles ($233) per ton, Russian First Deputy Prime Minister Viktor Zukbkov said.

Zubkov's statement came in the wake of a recent proposal by Central Bank Chairman Sergei Ignatyev to introduce floating export duties on grain to ease the consequences of the lifting of the grain embargo scheduled for July 1, which could spur grain price hikes and push up inflation.

"We already talked about that and there is no big secret about that: if the price of grade 3 and 4 wheat jumps to 6,500 rubles per ton, this is possible," Zubkov said.

The current wheat price is about one thousand rubles lower, Zubkov said.

"So far, there is no need to impose the export duty," he said.

Russian Economic Development Minister Elvira Nabiullina has said that the central bank's proposal could be an effective measure to regulate the grain market.

The government will drop the grain export embargo from July 1. It was imposed last August in the wake of a severe drought which cut Russia's grain production by 37 percent.

Ignatyev has said the cancellation of the grain embargo was the only serious factor that could spur inflation, which is running at an annual 9.7 percent. The government is targetting an inflation rate of below 7 percent this year.