The Russian Federation's Minister of Agriculture, Alexandr Tkachov announced on 26 May 2015 that duty on exports of Russian grain will be imposed during the 2015-16 agricultural year, beginning 1 July.

Export duty will be calculated based on a contract price converted into roubles at the rate of 50% of the contract price per MT less RUB5,500 subject to a minimum tariff of RUB50 per MT. The duty is intended to restrict exports only if the grain price exceeds RUB13,000 per MT, which could occur if the rouble weakens against the US dollar below the rate of 60-70 roubles per dollar. At a grain price between RUB10,000 to RUB13,000 per MT, the tariff is intended to act as a fixed levy.

On 15 May 2015, ahead of the scheduled expiry date, the Ministry of Agriculture lifted export duties on grain of 15% plus 7.5 euro per MT (subject to a minimum of 35 euro per MT) which had been in place since 1 February 2015. It is estimated that the export duties in place between February and May 2015 had prevented the export of some 3m MT of Russian grain.

As a result of the announcement traders will need to be prepared for the re-imposition of export duties after 1 July 2015, which could be substantial should the rouble slide against the dollar. Roubles will need to be kept available for payment of export duty. The prospect of significant duties becoming will compound traders' currency risks.

Traders should consider now whether contractual protections can be included in agreements that may be exposed to the dual risks of rouble depreciation and export duties payable in roubles on dollar-denominated contracts.