Wheat prices should be expected to rise in Azerbaijan

Baku/12.03.22/Turan: Russia's Sub-Committee on Customs Tariff and Non-Tariff Regulation has approved a decision to impose a temporary ban on grain exports from the Russian Federation to the countries of the Eurasian Economic Union (EAEU) until August 31, 2022. According to the Russian Ministry of Economic Development, the export of sugar and raw sugar to the countries of the Eurasian Economic Union, as well as outside the union, has been banned. I must note that this decision does not apply to Azerbaijan and non-member countries of the Eurasian Economic Union. After this decision, the countries of the Eurasian Economic Union will not be able to get wheat, meslin, rye, barley, and corn from Russia as easily as before on preferential terms. The Russian Ministry of Agriculture believes that the EAEU countries have received the required amount of grain duty-free this season. Eduard Zernin, chairman of the Board of the Russian Union of Grain Exporters, said in a press release that partners in the EAEU "have long received reasonable grain volumes." Zernin also noted that Kazakhstan and Kyrgyzstan have sharply increased grain purchases after the introduction of export quotas by the Russian Federation.

Alexander Korbut, vice-president of the Russian Grain Union, told the media that Kazakhstan received 2.5 million tons more wheat than planned. He believes that Russian grain goes "to other markets via domestic Kazakhstan transit" - to Uzbekistan, which is not a member of the EAEU. However, Uzbekistan had to pay the export duty by importing that amount of wheat from Russia. Thus, at a time when the price of wheat in the world market has risen sharply, the Russian government is trying to prevent the export of grain beyond the borders of the Union countries and to have these facilities.

The Russian Ministry of Agriculture says grain supplies in Russia now exceed 150 percent. This means that Russia's grain reserves exceed its demand by 50%.

The Russian government links the ban on the export of sugar and raw sugar outside the Union to the protection of the domestic market in the current situation. Our research shows that in the last few days there has been a serious shortage of sugar in Russian markets.

ASTNA expert Vahid Maharramov notes that Azerbaijan pays most of its demand for food wheat, 55-60% in some years, and even 70% in some years, at the expense of wheat imported from Russia. Azerbaijan also imports 45% of the raw sugar used for sugar production from Russia. If Russia increases the export duty on wheat, prices for wheat, flour, flour products, and bread are expected to increase in Azerbaijan.—0—