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USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed

12 April 2013

USDA GAIN: Russian Federation Oilseeds and Products Annual 2013USDA GAIN: Russian Federation Oilseeds and Products Annual 2013

FAS/Moscow forecasts Russia’s 2013 production of its three main oilseed crops (sunflowerseed, soybeans and rapeseed) at 11.2 million metric tons (MMT), a 3 percent increase from 2012. The sunflowerseed crop is forecast to remain at 8.0 MMT, while soybean production is forecast to increase by 300,000 MT to 2.1 MMT, a new record. Rapeseed production is forecast to increase slightly to 1.1 MMT due to increased yields of winter rapeseed. With Russia joining the WTO in August 2012, export duties on oilseeds must gradually decrease, and by the end of the transitional period (3-4 years depending on the oilseed) will be eliminated (soybeans) or sharply cut (sunflowerseed, rapeseed).
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed


Oilseed, Sunflowerseed
Oilseed, Soybean
Oilseed, Rapeseed
Oilseed, Peanut


FAS/Moscow forecasts that in MY 2013/14 area sown to Russia’s main oilseeds (sunflowerseed, soybeans, and rapeseed) will increase by 0.3 million hectares, or 2 percent from the previous year, to 9.5 million hectares. Assuming average weather, production of these three major crops is forecast to reach 11.2 MMT in MY 2013/14. Sunflowerseed sowing prospects, to a great extent, will depend on grain prices, which, if they remain high by mid-May, may stimulate farmers in European Russia to increase spring grain and pulses sowing on fields that might be sown to sunflowerseed. In addition, a switch to grain or pulses is in accordance with traditional crop rotation patterns.

Area sown to oilseeds has been steadily growing in the last 10 years in Russia, especially for oilseeds other than sunflowerseed. Nevertheless, sunflowerseed still dominate production, and since yields of sunflowerseed are still heavily dependent on weather, and change from year to year, the fluctuations in production of oilseeds in Russia from year to year are also significant (Chart 1).


FAS/Moscow forecasts area sown to sunflowerseed to increase by 0.4 million hectares to 6.9 million hectares. However, this increase in area is likely to occur in less fertile areas, while more fertile land will be sown more to spring grains and pulses, soybeans and fodder crops. Thus, yields of sunflowerseed will remain low, and production is forecast at the same level as in MY 2012/13 – 8.0 MMT.

The South of European Russia (the Southern and North Caucasus federal districts) remains the major sunflowerseed production area, and in 2012 accounted for 38 percent of Russia’s total sunflowerseed crop. However, during the last 5 years area sown to sunflowerseed in Southern European Russia has actually decreased as a result of strong competition for area with other crops. This area is not only very productive and has the best climatic conditions in Russia, it is also close to key export ports, thereby making it very attractive for grain production (which is quickly exported). As a result, sunflowerseed production in this area has dropped by 26 percent from 2008. Meanwhile, the Central Federal District has increased sunflowerseed production by 80 percent, primarily due to improved seeds and agronomy practices, and its share in the total sunflowerseed production has reached 30 percent in 2012. The demand for sunflowerseed in the Central Federal District has been supported by the construction of several new crushing plants in Voronezh and Belgorod oblasts in the last 5 years. Farmers in the Volga Valley Federal District increased sunflowerseed production by 39 percent, mostly due to increased sown area, while average yields still remain low. The share in the total production is 29 percent. The Chart 2 shows production in 2012 by major federal districts.


FAS/Moscow forecasts soybean area to increase in MY 2013/14 to 1.6 million hectares and production is forecast to increase to 2.1 MMT from 1.8 MMT in 2012. The production increase is expected mostly due to increased area planted in the Far East and in the Central European Russia. Farmers in the Central European Russia are planning to plant more soybeans and less sugar beets in 2013, because the demand for feeds was high, while sugar beet crop, one of their major crops, did not bring significant profits in 2012 because of low prices.

According to industry analysts, compound feed consumption at the livestock and poultry enterprises in Belgorod, Kursk, Voronezh, Lipetsk and Tambov blasts (oblasts of the Central Federal District) increased in 2012 by 17 percent from the previous year and reached 5.3 MMT. By 2020, compound feeds consumption is forecasted to exceed 8 MMT, and consumption of soybean meal is forecast to increase from 523,000 MT in 2012 to 830,000 MT in 2020. Some large companies are investing in soybean crushing in the Central Federal District. Thus, the Miratorg company, Russia’s major producer of pork, and expected to be a large producer of poultry in Bryansk oblast (also Central Federal District), in 2012 has built a soybean crushing plant in Beldorod oblast. Sunflowerseed crushing and vegetable oil trading company EFKO plans to construct a large soybean crushing factory in the Central Federal District as well. According to EFKO’s analysis, soybeans have the following benefits for farmers in the Central Federal District: First, soybeans are the best (after peas) predecessor for grains and many other crops in crop rotation patterns; second, oats and barley leave grain on the field that may germinate and lead to spread of diseases and pests; third, soybeans leave nitrogen in the soil that leads to decreased application of fertilizer; and lastly, the time of harvesting soybeans in the Central FD coincides with the sowing winter wheat.

The Russian Far East represents 57 percent of Russia’s soybean production, and production in the Far East doubled in just the last 5 years. However, soybean production in other federal district of Russia has increased even faster. For example, in the same 5 years soybean production in the South of European Russia (Southern and North Caucasus federal districts) and in the Volga Valley increased by 135 and 140 percent respectively, and soybean production in the Central Federal District increased by 560 percent from 50,000 MT in 2008 to 330,000 MT in 2012, and this district became the third largest producer of soybeans. So despite strong growth in production, in the past few years the share of the Far East in total production has actually decreased from 68 percent to 57 percent. Despite this, the Far East that still has the best prospects for higher soybean production in the coming years due to a number of factors. First, there is less competition in the Far East with other commercial crops, as opposed to Southern European Russia. And second, strong export demand and the anticipated removal of export duties is expected to also contribute to higher Far East production.


FAS/Moscow forecast rapeseed production in MY 2013/14 to increase only slightly, from 1.035 MMT to 1.1 MMT. The forecast increase is due to increased production of winter rapeseed, which although is planted to a much smaller area than spring rapeseed, has yields roughly 60-90 percent higher. Unlike last year, winter rapeseed in Stavropol kray, Russia’s major producer, is currently in good condition. Spring rapeseed still dominates sown area, and farmers in almost all federal districts, except Southern and North Caucasus federal district, plant spring rapeseed. The leading provinces for rapeseed area are Volga Valley Federal District (31 percent of the total spring rapeseed sown area in 2012), Central Federal District (27 percent of the total) and Siberia Federal District (25 percent of the total). If grain prices remain high, competition with grain for land in these federal districts will be high, and it is not likely that farmers will increase area sown to rapeseed.

Linseed for Oil (Crown flax and Cemilina)

Production of linseed for oil (crown flax and Cemelina) increased in the last 3 years driven by high foreign market demand and the absence of export duties (Chart 4). Although some varieties of these crops can be sown more to the north than sunflowerseed and soybeans, the bulk of production of these crops is found in the Southern and North Caucasus federal districts, the major export-oriented districts of European Russia. Thus, in 2012 area sown to crown flax in the Southern Federal District was 47 percent of the total Russian area sown with this crop, and area sown in the North Caucasus federal district was only 16 percent of total output.


Industry analyst estimate Russia’s oilseeds crushing capacity in at 14 MMT in 2012/13, and forecast a further increase in 2013/14. Processing of oilseeds is increasingly concentrated at modern, new crushing plants owned by large agro-holding companies while crushing at small plants is decreasing.


Assuming that the sunflowerseed crop is 8.0 MMT in MY 2013/14, the same as in MY 2012/13, sunflowerseed crush will remain the same as in MY 2012 at 7.4 MMT. The forecast volume of crush is expected to allow Russia to produce 2.75 MMT of sunflowerseed meal and 3.0 MMT of sunflowerseed oil. Sunflowerseed crushing still remains a profitable and attractive business for large agro-holding companies, and crushing capacity continues to grow. The gap between sunflowerseed prices and prices of crude sunflowerseed oil has remained the same during MY 2012/13. However, industry analysts estimate that domestic vegetable oil market is saturated and it is more and more difficult to keep crude sun oil prices high. Only large crushing companies can afford increased cost of production (expenses for sunflowerseed) or can find markets for processed products (meal and oil). Increased sunflowerseed prices have lead to further concentration of crushing at large modern plant owned by large agro-holding companies.


Demand for soybean meal and cake continue to grow due to stronger demand from domestic poultry and swine industries. Along with growing demand soybean crushing is also expanding. In 2012, a soybean crushing facility was constructed by one of Russia’s major pork producing company in Belgorod. Russia’s largest soybean crushing company, Sodruzhestvo in Kaliningrad, has increased its crushing capacity in MY 2012/13 to 2.3 MMT. FAS/Moscow forecasts soybean crush to increase from 2.4 MMT in 2012/13 to 2.8 MMT in MY 2013/14. Domestic production of soybean meal is forecast to increase from 2.0 MMT to 2.25 MMT, and oil from 0.4 MMT to 0.5 MMT.


Rapeseed consumption is still driven by the EU demand for use in biofuels, since most of Russia’s rapeseed oil is exported. FAS/Moscow forecasts rapeseed crush in MY 2013/14 to remain the same as in MY 2012/13 at 1.05 MMT.



FAS/Moscow forecasts bulk, unprocessed sunflowerseed exports in MY 2013/14 to remain at the same level as 2012/13 – 50,000 MT. In accordance with WTO commitments, Russia will be reducing export duties on sunflowerseed by equal installments during the next 4 years (since joining WTO in August 2012) until they reach 6.5 percent, but not less than 9.75 Euro per MT. Currently, the export duty on sunflowerseed is 20 percent, but not less than 30 Euro per MT. Thus, the first reduction of export duties should likely be expected by August 2013. However, since domestic demand for oilseeds and their products remains high, these duty changes are unlikely to lead to large-scale exports in MY 2013/14. Prices may be impacted as domestic crushers begin to have to increasingly compete with export demand. FAS/Moscow estimates sunflowerseed exports in MY 2012/13 at 50,000 MT. From September 2012 through February 2012, Russia exported 23,906 MT of sunflowerseed, including 11,854 MT to Turkey, 5,363 MT to Azerbaijan, 2,604 MT to Spain, 1,278 MT to Armenia.


Russia’s exports of whole soybeans has been increasing and FAS/Moscow forecasts Russia’s exports in MY 2013/14 at 150,000 MT, up from 100,000 MT. This is expected to be driven by strong Chinese demand for Russian soybeans for crushing, larger production in the Far East, and reduced export duties. In accordance with WTO commitments, the export duty on soybeans will be reduced in equal installments during the next 3 years, until it reaches zero by 2015. Thus, the first reduction of export duties should be expected by August 2013. Currently, Russia’s export duty on soybeans remains 20 percent, but not less than 35 Euro per MT.

In September 2012 through January 2013, Russia exported 52,525 MT of soybeans (compared with 4,588 MT in the same period last year), including 45,114 MT to China, 4,611 MT to Spain, and 2,234 MT to Azerbaijan.

FAS/Moscow forecasts an increase of soybean for crushing imports to 0.9 MMT in MY 2013/14, from 0.7 in 2012/13. The demand for soybean meal is very high, and despite growing domestic production, Russia will continue imports of soybeans as European Russia has limited land for expansion of soybeans area, while shipments of soybeans from the Far East to the European Russia for crushing are expensive due to high transportation cost and Far Eastern beans have strong demand from China. This increase in imports is due to likely lower global soybean prices, as well as the significant expansion of crushing capacity at major importer facilities. Soybeans are imported duty free.

FAS/Moscow estimates recovery of soybean imports in the second half of MY 2012/13, after high prices slowed down in the first half of MY 2012/13, and estimates soybean imports in MY 2012/13 at 0.7 MMT. In September 2012 through February 2013, Russia imported only 264,800 MT of soybeans, including 79,400 MT from Paraguay, 64,400 MT from Brazil, 56,000 MT from the U.S. (shipments in December – 25,700 MT and in February – 30,200 MT), and 37,200 MT from Ukraine.


FAS/Moscow forecast rapeseed exports in MY 2013/14 at 50,000 MT, an increase from 40,000 MT in MY 2012/13. Export duties (20 percent but not less than 35 Euro per MT) are to be gradually reduced during the 3 years following Russia’s WTO accession in August 2012 until they reach 6.5 percent, but not less than 9.75 Euro per MT. The first reduction is expected by August 2013. Exports may increase slightly in MY 2013/14 as a result, but producers will still likely to prefer to crush rapeseed domestically and export oil to Europe, the largest market for rapeseed oil for biodiesel. In July 2012 through January 2013, Russia exported 20,215 MT of rapeseed to Germany, Denmark and Latvia, although in January exports were very low.

Linseed for Oil (Crown Flax and Camelina)

Russia has also began exporting flax (linseed oilseeds), and this oilseed has quickly become the largest oilseed export from Russia due to stable demand and absence of duties. Exports of linseed for oil (Crown Flax and Cemelina) in September 2012 through February 2013 reached 183,778 MT. The major importers of Russian linseed for oil were Belgium (116,625 MT), Turkey (27,967 MT), Latvia (14,535 MT), Italy (13,335 MT), Germany (5,769 MT).


The Russian government still has some programs indirectly targeted to improvement of the oilseed industry, such as “Program on the Development of the Feed Industry”. However, the financing of these programs is small, and oilseed farmers may benefit only from the government support that applies to all crop producers. In 2013 this support has been reduced due to federal budget constraints. In accord with the WTO requirements, the previous support through fuel and fertilizer price discounts was replaced with per-hectare decoupled support. Analysts estimate that the actual per hectare support fell by two or three times. However, federal support through soft-term loans (interest rate subsidies) has been expanded to processors and marketing of crops, and crushers may benefit from these changes in the interest rate-support programs.

Russia’s WTO commitments (lifting or decreasing export duties) have not yet been implemented in the first year of Russia’s WTO membership. However, the gradual decrease in oilseeds export duties will likely begin by August 2013, one year after Russia’s acceding WTO.


Meal, Sunflowerseed
Meal, Soybean
Meal, Rapeseed
Meal, Fish


FAS/Moscow forecasts oilseed meal production to increase by 0.2 MMT in MY 2013/14 to 5.6 MMT. This increase is due to higher production of soybean meal to 2.25 MMT from 2.0 MMT. Production of sunflowerseed meal and rapeseed meal are forecast at the same level as last year or 2.75 MMT, and 0.6 MMT respectively.


Domestic demand for protein feeds, including oilseed meals, is strengthening along with the development of poultry and swine industries and increasing concentration of poultry and pork production at large agro-holding companies. Industrial methods of feeding envisage replacement of concentrated feeds (grain based) by compound feeds that include protein meal, vitamins, and other nutrients.

FAS/Moscow forecasts that Russia’s total domestic consumption of the three major oilseed meals (sunflowerseed, soybean and rapeseed) and fish meal will increase to 4.93 MMT in MY 2013/14 compared to 4.76 MMT in MY 2012/13. Soybean meal will comprise over 55 percent of total consumption, with sunflowerseed meal at 34 percent, rapeseed meal at 8 percent, and fish meal at only 3 percent.


Despite high domestic demand for protein feeds, a significant portion of sunflowerseed meal is exported, as crushers prefer shipping sunflowerseed meal abroad on stable contracts with steady buyers. In MY 2012/13, roughly 36 percent of Russian sunflowerseed meal was exported. Meanwhile, domestic poultry producers and other consumers of protein feeds prefer soybean meal, either domestic or imported.

Sunflowerseed Meal Trade

FAS/Moscow forecasts sunflowerseed meal exports in MY 2013/14 at 1.1 MMT, a 10 percent increase from the estimated 1.0 MMT in MY 2012/13. In September 2012 through February 2013 Russia exported 795,100 MT of sunflowerseed meal. Leaders in imports of Russian sunflowerseed meal were Turkey (218,700 MT), Italy (163,300 MT), Latvia (107,200 MT), Spain (70,900 MT), France (50,700 MT), and Denmark (44,100 MT). Imports of sunflowerseed meal are not significant.

Soybean Meal

FAS/Moscow forecasts Russia’s soybean meal imports in MY 2013/14 at 550,000 MT, the same as in MY 2011/12, and a 10 percent increase from (estimated) 500,000 MT imports in MY 2012/13. In accordance with Russia’s WTO commitments, the import duty on soybean meal fell from 5 percent to zero immediately after Russia’s WTO accession in August 2012. However, international soybean meal prices remain high, and with domestic crush of soybeans increasing, total imports of soybean meal in MY 2012/13 is lower than in MY 2011/12. In September 2012 through February 2013 Russia imported 282,000 MT of soybean meal (in the same period last year – 365,800 MT). The major sources of soybean meal in this period were Argentina (176,500 MT), Brazil (75,800 MT), Germany (13,900 MT), and United States (12,400 MT).

Soybean meal exports still remain low, although in MY 2012/13 it is estimated to increase from 10,000 MT to 30,000 MT on a year-to-year basis. In previous years, Russia exported small amounts of soybean meal to Ukraine and some other CIS countries. In MY 2012/13, Russia began exporting soybean meal to EU countries, including Denmark, Netherlands, UK, Sweden, most likely from the crushing facilities in Kaliningrad. FAS/Moscow forecasts rapeseed meal exports to increase slightly to 250,000 MT in MY 2013/14.


Oil, Sunflowerseed
Oil, Soybean
Oil, Rapeseed
Oil, Palm


Sunflowerseed oil remains the major vegetable oil consumed in Russia and FAS/Moscow forecasts that sunflowerseed oil production in MY 2013/14 will increase only slightly, by 1.6 percent, or 50,000 MT, to 3.0 MMT. This increase will result in a related increase in exports while domestic consumption will remain flat.

Production of soybean oil is increasing along with growth of domestic soybean production and imports, but the share of soybean oil in domestic consumption does not exceed 10 percent of the total domestic consumption. Consumers prefer sunflowerseed oil to soybean and other vegetable oils in food consumption. FAS/Moscow forecasts production of soybean oil at 0.5 MMT, an 14 percent, or 60,000 MT increase from the estimated production of soybean oil in MY 2012/13. Production of rapeseed oil is forecast at 415,000 MT, a 5 percent increase from the estimated production in MY 2012/13.


Russia’s per-capita vegetable oil consumption (food and industrial) is estimated at approximately 25 liters per capita per year, lower than in Europe and in the United States. However, both food use and industrial domestic consumption have stabilized as of MY 2012/13 and consumption is not forecast to increase significantly in MY 2012/13. Sunflowerseed oil comprises 65 percent of domestic food vegetable oil consumption, and 63 percent of industrial vegetable oil consumption in Russia. Soybean oil comprises 10 percent of food consumption, and only 8 percent of food consumption. The share of rapeseed oil in food and industrial consumption is 6 percent and 4 percent respectively. The share of imported palm oil in food consumption is 19 percent, and in industrial consumption is 25 percent.


FAS/Moscow forecasts sunflowerseed oil exports to increase by approximately 100,000 MT to 0.9 MMT, compared with 0.8 MMT in MY 2012/13, but not to reach the record 1.4 MMT level of MY 2011/12. In September 2012 through February 2013, Russia exported 461,100 MT of sunflowerseed oil, including 368,000 MT of crude oil (Turkey was the major destination – 181,200 MT, followed by Egypt – 99,200 MT) and 93,400 MT of refined oil. Imports of sunflowerseed oil were very minor: 9,300 MT only, including 7,200 MT of crude oil and 2,100 MT of refined oil.

Russia has been increasing port facilities for vegetable oil handling, including exports of sunflowerseed oil and imports of palm oil. In the beginning of 2013, the Novorossiysk Sea Commodity Port (NMTP) that owns grain terminal in Novorossiysk concluded an agreement with the United Grain Company (in the Group Summa) on the construction of a vegetable oil tank terminal in Novorossiysk. The planned capacity of the terminal is 2 MMT. The beginning of construction is in 2014, with coming on line in 2015-16. This will be the first deep water terminal for vegetable oil handling in Russia. Presently vegetable oil is exported from the smaller terminals in the Azov basin, including from Taman, the first (semi-deep) sea terminal in the Azov-Black-Sea region, which belongs to the EFKO company, one of the Russia’s major producers of vegetable oils. According to industry analysts, in MY 2011/12, exports of vegetable oil through the Azov sea ports amounted to 1.8 MMT, of which 1.4 MMT was sunflowerseed oil. There is a significant need for a deep water terminal. While importers such as Turkey and Egypt can be supplied via smaller vessels, larger ships are port handling capacity is needed to begin exporting to markets such as India and China.

Industry analysts consider that Russia has significant opportunities to increase exports of vegetable oil. The estimated profitability of companies that work with vegetable oil (from oilseeds farming through crushing and including exports) is 1.5-2 times higher than the profitability of companies that work only with grain and grain exports.

FAS/Moscow forecasts soybean oil exports to increase by 13 percent to 180,000 MT in MY 2013/14. In September 2012 through February 2013, Russia exported 73,500 MT of soybean oil, including 21,000 MT to Algeria, and the rest mostly to EU states. Exports to the EU countries varied from 9,000 MT (to France) to 500 MT to Latvia and Lithuania.

FAS/Moscow forecasts also a slight increase in rapeseed oil exports from 220,000 MT in MY 2012/13 to 230,000 MT in MY 2013/14. From July 2012 through February 2013, Russia exported 146,400 MT of rapeseed oil, and beginning 2013 exports continues at good pace. Thus, by the end of MY (March – June) Russia may export another 70,000 – 80,000 MT of rapeseed oil.

Russia continues imports of palm oil both for food and industrial use. FAS/Moscow forecasts imports of palm oil in MY 2013/14 at 640,000 MT, a 1.6 percent increase from MY 2012/13. The Customs Union technical regulations for dairy products have not been adopted so far, and there are no restrictions on use of palm oil as a replacer of milk fats in products that are called “dairy”. Palm oil is also widely used in confectionary products, and often replaces more expensive vegetable oils, such as cocoa oil in “chocolate” candies and in other confectionary and bakery products. FAS/Moscow estimates imports of palm oil in MY 2012/13 at 630,000 MT. In the period of May 2012 – February 2013, Russia has already imported 530,000 MT of palm oil, with monthly imports in January and February running at slightly less than 60,000 MT.


Russia regulates production of vegetable oils by the safety and quality requirements as stipulated in the Russian Technical Regulation (TR) on Oils and Fats (Federal Law of the Russian Federation #90-FZ of June 24, 2008). Beginning July 1, 2013 this Russian TR will be replaced by the Customs Union TR on Oils and Fats, adopted by the Customs Union Commission on December 9, 2011:

Russia’s trade policy also influences the domestic vegetable oil market. Vegetable oils are exported duty-free and import tariffs on vegetable oil vary. Updated information on import tariffs on different vegetable oils is available on the web-site Import tariffs on vegetable oils for industrial processing are lower than tariffs on imports of vegetable oil for packaging and for direct human consumption.

April 2013

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