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The European Union wants a tax on Russian grain

2024-03-29 13:20:03

The European Commission will impose customs tariffs “ prohibitive » to Russian and Belarusian agricultural products. Russian cereals, described by the EU as “ Income source » for Moscow, are particularly targeted.

This may come as a surprise given that the European Union, with France in the lead, is one of the largest cereal producers in the world: imports of Russian cereals – wheat, corn, barley – have almost doubled in one year. In 2023, 1.5 million tonnes of Russian grain were imported into the European Union, compared to 960,000 tonnes the previous year.

Russian grain first arrives from southern Russian ports to Mediterranean countries. Italy is the leading European customer (423,000 tonnes, mainly durum wheat), ahead of Greece (237,000 tonnes) and Spain (166,000 tonnes). A few thousand tonnes then pass by road, via the Baltic countries, with Latvia in the lead (263,000 tonnes).

« Russia’s aggressive trade policy »

Several factors explain these figures. First, because, unlike oil, steel or diamonds targeted by sanctions since the Russian invasion of Ukraine, Russian cereals enter European territory freely, and pay almost no, if any, payment. tariffs.

Then, because the last harvests in Russia were very good. Wheat stocks are full and Moscow can launch a price offensive. “ There is a very aggressive commercial policy of Russia which, in a certain way, forces the hand of buyers, by offering ever lower prices, below the reference quotations. », analyzes Philippe Heusèle, spokesperson for Intercéales which represents professionals in the sector in France.

« We know that Russian port and grain interests are very close to power and therefore we have here the translation of a political will of the Kremlin to make cereals a food weapon to undermine the European market in a certain way », he adds.

Destabilization of the European market

If Russian cereal imports remain limited in volume – compared to the 272 million tonnes produced in the European Union in 2023 – Moscow’s price policy contributes to destabilizing the European market, already undermined by imports. Ukrainian cereals. It is this abundant supply which partly explains the fall in prices: wheat has reached its lowest level for three and a half years.

The European Commission, pressured by several countries to act (Czech Republic, Poland, Baltic countries) has decided to tax Russian cereals. The proposal, which must still be ratified by a majority of Member States (fifteen countries representing 65% of Member States), plans to impose customs duties at 95 euros per tonne or 50% of the value of cereals, oils or products derived from it. The tax will only concern cereals intended for the European market (those which only transit through the European Union will not be taxed in the name of respecting food safety).

Brussels wishes “ dry up » the revenue allowing Moscow to finance its war in Ukraine and thus reestablish competition “ healthier » on the European market. The signal is also political. Less than three months before the European elections, and while discontent still affects certain countries such as the Czech Republic or the PolandBrussels intends to show that it stands alongside the grain growers.

Read alsoThe West scores points in its war against Russian oil

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