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. Last Updated: 07/27/2016

New Tariffs Slapped on Cereal Exports

APNabiullina, Deputy Prime Minister Alexei Kudrin and Putin during a government meeting in the Kremlin on Monday.
The government decided on Monday evening to introduce export duties on wheat and barley in an effort to dampen inflation, which is likely to overshoot the full-year inflation target of 8 percent.

Other measures to limit inflation approved by the government included the reduction of import duties on dairy products and the introduction of tighter controls over regional food supply monopolies.

Prime Minister Viktor Zubkov also ordered the government to study the possibility of maintaining lowered railway tariffs for the transportation of grain.

Inflation rose 0.8 percent in September, the State Statistics Service said Friday. Inflation from January through September reached 7.5 percent, up from 7.2 percent over the same period last year.

"Unfortunately, this means that at the end of the year we will go over the 8 percent mark," Economic Development and Trade Minister Elvira Nabiullina said at a government meeting earlier in the day.

The government had set this year's target for inflation at 8 percent, down from last year's 9 percent rate.

Nabiullina did not specify by how much export and import duties would change, but her ministry earlier stated that the export duties on barley and wheat could reach 30 percent and 10 percent, respectively.

Nabiullina attributed the spike in consumer prices to a rising demand for farming produce from India and China. In addition, the European Union slashed or canceled export subsidies for farming produce exported to Russia, she said.

UBS investment bank said in a research note Monday that the September inflation surge could prompt an upward revision of its year-end forecast of 9 percent.