TIRANA, Jan. 27 – The Albanian government says it is considering several options to prevent an unavoidable increase in bread prices from tax hikes by Russia, where Albania imports the overwhelming majority of its wheat needs due to favourable prices.
Speaking at a meeting with flour producers this week, Agriculture Minister Edmond Panariti said government was mulling several options, including the increase of wheat reserves, tax cuts and a fixed exchange rate for the USD dollar which has appreciated by 20 percent in the past six months.
“We will take every possible measure so that bread prices do not change,” said Panariti, adding that the flour reserves, currently only for one month should increase to two or three months. Asked about Russia’s tax hikes, Panariti said “It is in Russia’s sovereignty to apply tariffs, we can do nothing about it, the important thing is what we can do to counter-balance these tariffs by finding other operators where we can import from or applying support measures for producers.”
Higher taxes imposed by the Russian government on wheat exports starting February 2015 are expected to have a negative impact on Albania which secures around 80 percent of its wheat needs from Russia.
In an effort to reduce the increased export and balance the supply due to increased prices in global markets against the decreased value of ruble, the Russian government has decided the duty on wheat exports will amount to 15 percent of the customs price plus 7.5 euros and will be no less than 35 euros ($43) per tonne from Feb. 1 until June 30, 2015.
Data show Albania imports around 50 percent of its wheat needs from Russian and another 30 percent from Serbia which is also dependent on Russian imports.
