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Volga Baikal AGRO NEWS Update on the Russian Soybeans Market !!!
Export duty on soybeans can be raised up to 20%.
The Fat and Oil Union believes that this should provide the Russian processors with raw materials and keep the price of oil and meals.
This year the soybean harvest can reach 4.4 million tons.
Following the proposal to increase the export duty on sunflower up to 30%, the Oil and Fat Union decided to propose to the Ministry of Economic Development and Trade to introduce a 20% duty on the export of soybeans, RIA Novosti reports citing the union’s executive director Mikhail Maltsev. According to the authors of the appeal, this should restrain the export of soybeans and support Russian processors, says Kommersant. Now supplies are not subject to duty.
According to the publication, the Ministry of Agriculture ready to consider the union proposal. Russia is interested in increasing self-sufficiency in soybeans, according to the department’s estimates, its production in the country will grow year by year. In 2019, the agricultural crop amounted to 4.36 million tons, this year it is planned to reach 4.4 million tons, in 2021 – 5.1 million tons, in 2022 – 5.6 million tons.
Maltsev believes that the duty will provide Russian processors with raw materials and contain the price of oil and meal, which will reduce the cost of livestock products. Now in Russia there is an opportunity to process up to 7 million tons of soybeans, he estimates. At the same time, domestic prices are lower than in foreign markets, which stimulates exports and leads to losses for processors, the head of the union noted. According to the Institute for Agricultural Market Studies (IKAR), at the beginning of December in the central part of Russia soybeans cost 47-48 thousand rubles / ton, in the Far East – 43 thousand rubles / ton, while in the port of Dalian in China – $ 855 / ton, or more than 64 , 6 thousand rubles / t at the exchange rate of the Central Bank on December 3. Soybean meal in Russia costs 50-52 thousand rubles / ton, oil – 78-80 thousand rubles / ton. Last season, 1.3 million tons of Russian soybeans were exported abroad.
General Director of IKAR Dmitry Rylko sees no point in the new initiative. “We do not export soybeans from the European part of Russia at all, especially this year due to its uncompetitiveness in the world market, because it is very expensive with us,” – the expert commented to Agroinvestor“. “Therefore, it is pointless to impose an additional export duty when products are not exported.”
In significant volumes – up to 1 million tons per year – soybeans are shipped from the Far East. According to Rylko, the introduction of the duty will hit the interests of local farmers, who simply will have nowhere to put soybeans. “They will have to radically lower their prices, sacrifice profitability in order to take this soybeans somewhere in Russia. Why, if there is a huge, neighboring, well-paying market, especially China? Why quarrel with him? The Chinese will pay the same money, they will not raise the purchase price, ”says Rylko. In his opinion, there is a way out of the situation: it is possible, in parallel with the duty, to create a transport subsidy in order to transport soybeans from the Far Eastern Federal District to the European territory of the country or to Altai. A similar opinion is shared by the director of SovEkon Andrey Sizov: duty on soybeans can negatively affect the development of crop production in the Far East. In addition, Russia has international obligations, which the country assumed when it joined the WTO, he told Kommersant.
