(Bloomberg) -- Russia's proposal for additional wheat-export measures from June could prompt faster sales in the near term and discourage some spring plantings.
The biggest wheat shipper already is setting levies on grain shipments from mid-February through June, but it plans to replace them with a permanent tax as part of the response to President Vladimir Putin's demand to keep food prices in check.
The government now is considering introducing a floating wheat-export tax starting June 1, according to two people familiar with the matter. The tax could be 70% of the amount that remains after $200 is deducted from the export price of 1 ton of wheat, the people said, asking not to be identified because the discussions are private.
Farmers were considering holding onto grain until export restrictions end, "but the proposed tax would change that," said Matt Ammermann, a commodity risk manager at brokerage StoneX Group Inc. "So, if anything, old crop selling becomes a more realistic thought."
Russia's existing curbs are contributing to a global rally in wheat prices and helping stoke concerns about rising food prices. Benchmark wheat prices have jumped about 17% in Chicago during the past 12 months.
Russia probably exported a record amount of wheat for January as traders raced to send out cargoes before this month's tax takes effect. Still, there are signs that buyers are balking at high prices, with Egypt last month canceling a tender and Turkey buying less than it had sought.
Russian wheat export prices fell at the end of last month for the first time since mid-December.
The new tax proposal is very harsh, consultant SovEcon said in a report. Farmers may plant less wheat in spring than expected, and SovEcon could lower its estimate of 77.7 million metric tons for this year's wheat crop by as much as 2 million tons.
Growers face losing about $4.8 billion (about 360 billion rubles) in potential revenue during the 2021-22 season starting in July, assuming a wheat crop of 76 million tons and the average price of $290 a ton, SovEcon said.
That's in addition to an estimated $2.8 billion in lost potential revenue due to the export taxes during this season, the consultant said.
Another proposal being discussed would impose a floating tax on barley exports starting in June, one of the people said.