The new Russian tax will add pressure on the already high cost of wheat that has seen the price of bread and flour rise in recent weeks.
The tax is meant to protect the Russian market which is also suffering a shortage that has seen prices of items like bread in that country go up.
Russia has introduced a 25 euro (Sh3,225) duty per tonne of export wheat to discourage shipping out of the commodity as it protects its local market, a move that will hit Kenya as the country imports the bulk of the grain from Moscow.
The new Russian tax will add pressure on the already high cost of wheat that has seen the price of bread and flour rise in recent weeks.
The tax is meant to protect the Russian market which is also suffering a shortage that has seen prices of items like bread in that country go up.
“The duty on Russian wheat will have an impact on the price of the wheat locally as we import most of our crop from that country,” said Rajan Shah, chief executive officer Capwell Industries.
According to Russian agriculture consultancy firm SovEcon, the planned wheat tax could cut Russia’s overseas sales by about three million tonnes.
The potential fall in exports from the world’s leading wheat exporter will likely see the global price of the commodity continue on an upward trend.
Russia introduced a similar tax in 2014/2015 and the export volume for the crop dropped to 500,000 tonnes a week from two million in the same period.
SovEcon said many Russian farmers also think they could be in for better prices next year and are willing to hold on to their 2020-21 crop until the export tax expires June 30 this year.
The cost of a tonne of wheat has increased by 30 percent to Sh33,000 from Sh25,300 a year ago, sparking a rally both on bakers and standard flour.
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