Vegetable Oil Trade Union of Russia insists that it is necessary to export processed products and not export raw oil seeds to abroad and as result vegetable oil export from Russia in 2019 reaches 4 billion USD.
This year, the export of oil and fat products may reach a record $ 4 billion. Such a forecast was announced by Mikhail Maltsev, Executive Director of the Oil and Fat Union, during the Agroinvestor conference organized by Agroinvestor. Last year, the volume of shipments abroad in the sector amounted to $ 3.2 billion. The total export of agricultural products this year is expected to reach $ 24-25 billion, Deputy Minister of Agriculture Elena Fastova said at a conference.
Maltsev also noted that the gross harvest of oilseeds this year will be 22.5 million tons, which is 4.5 million tons more than last year and is a “record of records”. At the same time, even taking into account the expected record export of oilseeds, the load level of processing capacities reached 85-90%, the head of the union cited data. According to him, now announced the construction of new processing plants in the amount of another 10 million tons of oilseeds.
Therefore, Maltsev expects that the production of raw materials will continue to grow. “But here we see risks, because there are signals from the places that at the regional level the authorities are trying to limit oilseeds,” Maltsev said. So, for example, in October it became known that the government of the Orenburg region intends to make a number of changes to the procedure for providing unrelated support and not to pay subsidies to those who have more than 20% of the sunflower in the crop rotation.
The Oil and Fat Union also insists that it is necessary to restrain the export of oilseeds and to rely on shipments of processed products abroad. “We are dealing with this issue, because there is processing capacity, there is a demand for oil and fat products, while raw materials go abroad without processing,” he complained. The Union proposes to increase the export duty on sunflower from 6.5% to 20% and vegetable oil export from Russia in 2019 reaches 4 billion USD. Earlier, Interfax reported that the subcommission on tariff and non-tariff regulation, protective measures in Russia’s foreign trade, discussed the issue of increasing duties and decided to return to it after a while. In addition, according to the news agency, the Ministry of Finance is opposed, since the current rate is marginal, according to the obligations of our country in the WTO.
In addition, Maltsev advised farmers not to hold oilseeds in anticipation of higher prices and “not sit on a huge harvest.” “Although there was a drop in prices now in the season, it was due to external factors, although everyone took it as the actions of processors, but this is a complete broadcast of the foreign market,” Maltsev stressed. “We work in a zone of zero profitability, this year we’ve got a bit of a plus, but this is not comparable with the profitability indicators in crop production.” In addition, now prices have already begun to rise, despite a record crop, which suggests that manufacturers began to hold raw materials in the same way as last year. Then the industry began the processing season two weeks later than usual, failed its end, and as a result, those products that were not exported in 2018 switched to 2019, and we received a 25% increase in shipments, which is now see, said Maltsev. “By holding sunflower, people, taking into account the cost of storage, received less than they could,” he emphasized. – I would like to warn the market against such behavior. You need to understand that if there are no fundamental factors for price increases, then you do not need to wait for anything. ”
Since the beginning of September, sunflower began to fall in price against the backdrop of a record gross harvest, and for two and a half months its cost decreased by 23%. However, in the second decade of November, prices went up – the rise in oil prices and an increase in the export of seeds were affected. According to the portal oilworld.ru, at the end of November, the lowest average purchase price was in the Volga Federal District – 15903 rubles per ton, the highest was in the North Caucasus – 19210 rubles per ton. By December 6, sunflower in the Volga region went up to 15953 rubles per ton, it was still the lowest purchase price, in the North-West Federal District it reached 20285 rubles / t. At the Center, an average of 17,934 rubles per ton was offered for sunflower, and 18,812 rubles per ton in the South. In early September, in the South, a ton of sunflower without VAT stood at 19-19.5 thousand rubles, in the Center – 18-18.5 thousand rubles. Vegetable oil export from Russia in 2019 reaches 4 billion USD.