Russian rice importers angered by import duty hike
the duties levied on imported rice set to come into force at the
beginning of April, three months after the last duty regime ended.
But Russian rice importers are unhappy at the increased costs,
which they claim will damage consumer choice, writes Angela
Drujinina.
The new duty rate has been set at €70 per ton; the previous rate which was fixed at a minimum of €30 per ton up to a maximum of 10 per cent of the value. That previous duty regime came to an end at the beginning of February, since which time rice imports have, understandably, increased dramatically as producers and importers sought to take advantage of the lower costs.
The reason for the delay in updating the duty system is quite simply that Russian tax officials forgot to update it, according to an official from the Ministry of the Economy.
The duties are levied on imports in order to protect local producers from floods of cheap rice - indeed, the re-introduction of duties is likely to lead to a 10-15 per cent increase in local rice production as the level of imports drops significantly.
However, Russian rice importers argue that the duties distort the market and artificially inflate the cost of rice, which is detrimental to consumers. Some importers have even muttered about a conspiracy, suggesting that the 'hole' in the duty rates was deliberately planned to provoke an influx of cheap rice, thereby allowing local producers to underline the (apparent) need for far higher duties.
This is certainly the view held by Angstrem, the biggest packer of imported rice in Russia. "Russia traditionally produces round grain rice, which is the most suited to the climate and the terrain, but if you look on the shop shelves, you will find not only round grain rice but also long grain rice, flavoured rice and many others, which are not produced in Russia but which are imported," the company's spokesman said.
"Each of these varieties has much to recommend it in its own way, but what is important is that the Russian consumer be allowed to choose freely between them all."
The company's spokesman continued: "While it is right that the government do what it can to protect the livelihoods of Russian rice producers, it should also take into account the interests of Russian consumers. With this increase in import duties, the government is effectively telling the Russian populace that it must eat locally produced round grain rice, because the higher levy will limit the availability of other, imported, varieties."According to Angstrem, rice volume sales in Russia are around 700,000 tons, with local producers capable of supplying just 40 per cent of this total - a shortfall which, it claims, has been conveniently overlooked by the tax authorities.
"The remaining 60 per cent of Russia's rice requirements will still have to be imported, but at a higher cost than before. Furthermore, if it becomes too expensive to import rice, there will be a further shortfall, in turn increasing prices and damaging both local and foreign suppliers."
The company suggested a compromise: raise that import duties for round grain rice, the only direct competitor of local producers. This, they argue, would protect local suppliers while allowing consumers to continue to choose from a large variety of imported products.
