Oilseeds and Products Annual 2012

An Expert's View about Cereals, Leguminous Crops, Oil Seeds in Russia

Posted on: 21 Apr 2012

FAS/Moscow forecasts Russia's sunflowerseed production in 2012 at 8.5 million metric tons (MMT).

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 4/9/2012 GAIN Report Number: RS1222 Russian Federation Oilseeds and Products Annual Annual 2012 Approved By: Levin Flake Prepared By: Yelena Vassilieva Report Highlights: FAS/Moscow forecasts Russia?s sunflowerseed production in 2012 at 8.5 million metric tons (MMT), which would be 12 percent less than in 2011 but still the second largest crop in Russian history. Soybean production is expected to continue to increase and is forecast at 1.8 MMT, a 3 percent increase from last year, while rapeseed production is forecast at 0.9 MMT, a 15 percent decline from 2011. Russia?s soybean imports are expected to continue to grow as a result of strong feed demand and increasing crushing capacity. Exports of oilseeds are expected to decrease in MY 2012/13, although with WTO accession and the subsequent future reduction or removal of export duties on major oilseeds will likely boost exports in the longer-term. Executive Summary: Oilseeds Assuming normal weather, Russia?s production of its three main oilseeds (sunflowerseeds, soybeans and rapeseeds) in 2012 is forecast at 11.2 MMT, a 10 percent decrease from the bumper crop of 2011, but still the second largest oilseeds crop in Russian history. FAS/Moscow forecasts the sunflowerseed crop at 8.5 MMT, 12 percent less than in 2011. The decrease is due to expected smaller area in Southern European provinces where, despite high yields, sunflowerseeds compete for area with other profitable crops. Sunflowerseed sown area, however, is expected to remain steady or even increase in provinces with traditionally low yields, and this shift in area is expected to reduce the average yield in 2012/13. Soybean production is forecast to increase to 1.8 MMT from 1.75 MMT in 2011, and the increase will be mostly due to expanded sown area in the Far East, close to the Chinese border. Rapeseed production is forecast at 0.9 MMT, 14 percent below the last year, as the high-yielding winter rapeseed crop in Southern European Russia (especially in Stavropol kray-the major producer of winter rapeseed) has been damaged by winter frosts. After Russia joins the WTO, export duties on oilseeds will have to be eliminated (soybean) or reduced (sunflowerseed, rapeseed), although there is a 3-4 transition period for this to occur. As a result, although long-term these could have very significant impacts on the sector and trade, it is not yet clear what impacts there will be in the short term in MY 2012/13. FAS/Moscow forecasts exports of sunflowerseeds at 0.2 MMT, compared with the estimated 0.35 MMT in MY 2011/12, when bumper crop and low prices stimulated seeds exports despite duties. Meanwhile, Russia farmers will continue increasing production and exports of such oilseeds as linseed (for oil),which is not subject to export duties. Table 1. Russia: Consolidated PSD for Major Oilseeds for MY 2012/13, 1,000 MT, 1,000 HA MY 2012/13 Sunflowerseed Soybeans Rapeseeds Peanuts TOTAL Area Planted 7,000 1,300 800 0 9,100 Area Harvested 7,000 1,150 750 0 8,900 Beginning Stocks 637 88 154 8 887 Production 8,500 1,800 900 0 11,200 MY Imports 10 1,200 0 135 1,345 MY Imp. from U.S. 0 150 0 15 165 MY Imp. from EU 0 0 0 0 0 Total Supply 9,147 3,088 1,054 143 13,432 MY Exports 200 100 50 0 350 MY Exp. to EU 10 0 50 0 60 Crush 7,700 2,800 825 0 11,325 Food Use Dom. Cons. 300 0 0 135 435 Feed Waste Dom. Cons. 500 30 25 0 555 Total Dom. Cons. 8,500 2,830 850 135 12,315 Ending Stocks 447 158 154 8 767 Total Distribution 9,147 3,088 1,054 143 13,432 Meal The Russian poultry industry is continuing its expansion, leading to increased demand for protein feeds. Swine and dairy industries are also recovering, and large government support programs have led to a greater concentration of production at large industrial complexes, which use more protein feeds than middle- and small-size farms and private households. FAS/Moscow forecasts that despite a smaller sunflowerseed crop, oilseeds crush will remain at the last year?s level of 11.9 MMT due to increased imports of soybeans. Production of sunflowerseed meal is forecast at 2.8 MMT, 0.1 MMT less than in MY 2011/12, while production of soybean meal is expected to increase by 0.2 MMT to 2.2 MMT. Exports of sunflowerseed meal are expected to decrease only slightly in MY 2012/13 to 1.1 MMT, while imports of soybean meal are forecast to remain at 0.6 MMT. Table 2. Russia: Consolidated PSD for Major Meals for MY 2012/13, 1,000 MT POST MY 2012/13 Sunflowerseed Soybean Rapeseed Fish Meal TOTAL Crush 7,700 2,800 825 525 11,850 Extr. Rate 0.364 0.786 0.582 0.257 Beginning Stocks 155 81 0 3 239 Production 2,800 2,200 480 135 5,615 MY Imports 0 600 0 65 665 MY Imp. from U.S. 0 50 0 0 50 MY Imp. from EU 0 130 0 0 130 Total Supply 2,955 2,881 480 203 6,519 MY Exports 1,100 100 190 55 1,445 MY Exp. to EU 0 0 90 0 90 Industrial Dom. Cons. 0 0 0 0 0 Food Use Dom. Cons. 0 0 0 0 0 Feed Waste Dom. Cons. 1,700 2,700 290 145 4,835 Total Dom. Cons. 1,700 2,700 290 145 4,835 Ending Stocks 155 81 0 3 239 Total Distribution 2,955 2,881 480 203 6,519 Oil Sunflowerseeds remain the primary oilseed crop in Russia, and crushers? main product is vegetable oil. FAS/Moscow forecasts Russia?s total vegetable oil production in MY 2012/13 at 4.0 MMT, the same as in MY 2011/12. Sunflowerseed oil still remains the main vegetable oil used by domestic food and other industries, while imported palm oil remains the second largest oil consumed. Russia continues to export large volumes of sunflowerseed oil, both non-refined and refined, while importing large quantities of palm oil. FAS/Moscow estimates sunflowerseed oil exports in MY 2012/13 at 1.0 MMT, only a slight decline from 2011/12, as a result of lower production. Palm oil imports are estimated at 530,000 MT in MY 2012/13, a 5 percent decline due to possible changes in the technical regulations for some processed dairy products. Exports of rapeseed oil are forecasted to continue steady at 0.2 MMT, mostly for biofuel production in the EU. Table 3. Russia: Consolidated PSD for Major Vegetable Oils for MY 2012/13, 1,000 MT POST MY 2012/13 Sunflowerseeds Soybean Rapeseed Palm TOTAL Crush 7,700 2,800 825 11,325 Extr. Rate 0.403 0.175 0.400 Beginning Stocks 149 60 14 49 272 Production 3,100 490 330 0 3,920 MY Imports 30 10 1 530 571 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 10 0 0 10 Total Supply 3,279 560 345 579 4,763 MY Exports 1,000 170 200 0 1,370 MY Exp. to EU 500 140 150 0 790 Industrial Dom. Cons. 350 55 20 120 545 Food Use Dom. Cons. 1,700 260 110 410 2,480 Feed Waste Dom. Cons. 40 0 0 0 40 Total Dom. Cons. 2,090 315 130 530 3,065 Ending Stocks 189 75 15 49 328 Total Distribution 3,279 560 345 579 4,763 Commodities: Oilseed, Sunflowerseed Oilseed, Soybean Oilseed, Rapeseed Oilseed, Peanut Oilseed Production: FAS/Moscow forecasts that in MY 2012/13 area sown to Russia?s main oilseeds (sunflowers, soybeans and rapeseeds) will decrease by 0.6 million hectares, or 6 percent from the previous year, to 9.1 million hectares. Assuming average weather, production of these three major crops is forecast to reach 11.2 MMT in MY 2012/13. Production of oilseeds in Russia has been increasing since the beginning of 2000s. The increase was stimulated by construction of new large crushing facilities and growing domestic demand for oilseeds. In 2011 area sown to oilseeds increased by 9 percent and reached 10.4 million hectares, of which 9.7 million hectares were sown to Russia?s three main crops (sunflowerseeds, soybeans and rapeseeds). Table 4. Russia: Major Oilseeds, 2007-2011. 2007 2008 2009 2010 2011 Planted Area, 1,000 hectares Sunflowerseeds 5,326 6,199 6,196 7,153 7,614 Soybeans 777 747 875 1,206 1,229 Rapeseeds 658 680 688 856 893 - spring 507.74 534.91 638 638 718 - winter 150.11 144.78 178 218 175 Linseeds (for oil) 110 85 146 267 500 Mustard 58 58 101 110 134 Other 0 0 0 24 77 Total 6,929 7,769 8,005 9,615 10,447 Production, 1,000 hectares Sunflowerseeds 5,671 7,350 6,454 5,345 9,697 Soybeans 650 746 944 1,222 1,756 Rapeseeds 630 752 667 670 - spring 403.76 505.83 359 275 752 - winter 226.57 246.37 308 395 304 Linseed (for oil) 73 86 94 173 464 Mustard 11 29 24 36 88 Other 0 0 0 10 53 Total 7,035 8,963 8,183 7,457 13,115 Yields per harvested area, MT/HA 2007 2008 2009 2010 2011 Sunflowerseeds 1.13 1.23 1.15 0.96 1.34 Soybeans 0.92 1.05 1.19 1.18 1.48 Rapeseeds 1.18 1.20 1.20 1.10 1.26 - spring 1.04 1.04 0.93 0.68 1.12 - winter 1.56 1.76 1.82 1.90 1.77 Linseed (for oil) 1.01 1.05 1.02 0.86 1.04 Mustard 0.43 0.57 0.47 0.48 0.80 Source: Rosstat, www.gks.ru Sunflowerseeds FAS/Moscow forecasts sown area for sunflowerseeds to fall by 0.6 million hectares in 2012. While in 2011 area planted reached a record due to early spring dryness that prevented the sowing of spring wheat, this year the weather situation is not as negative for spring wheat sowing. In addition, sunflowerseed prices have been decreasing and returns from sunflowerseed at less efficient farms, which cannot afford superior seeds and chemicals, have been decreasing. As a result, this may stimulate these producers to return to better agronomic crop rotations and reduce sunflowerseed area. Assuming normal weather (and thus a reduction in yields from last year?s excellent weather), as well as a small shift in area from higher to lower yielding provinces, Russia?s sunflowerseed crop is forecast to fall to 8.5 MMT in 2012 from 9.7 MMT. South European Russia (Southern and North Caucasian federal districts) remains the major sunflowerseed producers, followed closely by the Volga Valley Federal District, where sunflowerseed production in the last 5 years increased by 160 percent to 3.2 MMT. The Central Federal District also increased production of sunflowerseeds in the last 5 years by 150 percent to 2.6 MMT. The Chart shows production in 2011 by major federal districts. Soybeans Soybean sown area is forecast to continue to grow and this increase is driven by rising demand for soybeans domestically from the livestock and poultry industries. FAS/Moscow forecasts soybean area to increase by 0.1 million hectares to 1.3 million hectares in 2012, which will allow production of 1.8 MMT of soybeans up slightly from 2011. The fastest growth for area continues to occur in the Russian Far East. The administration of Amur oblast (Far East Federal Districts), Russia?s major producer of soybeans, forecasts higher sown area which will offset expected lower yields from last year?s excellent crop. Although industry specialists consider that the Far Eastern soybeans are mostly consumed domestically, and that the low protein content of these beans is a limitation for their export, in reality soybean production in the Far East may be stimulated by Chinese and Korean demand in soybeans and by development of border trade (transparent and not transparent) with China. In the middle of 2011 the Russian government launched a targeted program ?Development of production and Processing of Soybeans in the Russian Federation in 2011-2013? which envisages an increase in area sown with soybeans to 1.5 million hectares in 2013, primarily due to increased area in the Far East, and an increase of crushing facilities in the Far East (primarily soybean crushing) from 4.6 MMT in 2010 to 6.3 MMT in 2013. The Ministry of Agriculture plans to extend this program to 2020 in the new State Agriculture Development Program 2013-2020, in order to increase production of soybeans to 3.75 MMT by 2020. The budget financing of the program 2011-2013 is small, but due to this program soybean producers will be able to participate in soft-term loan programs to purchase equipment and machines from the state owned dealer Rosagroleasing. However, the major stimulus for increased soybean production in the Russian Far East is growing Chinese demand for meals. With Russia committing in its accession to the WTO to completely eliminate export duties on soybeans within 3 years of joining, this is expected to create an additional incentive for expanding area in the future. In MY 2011/12 soybean planting and production increased to historic maximum of 1.2 million hectares and 1.8 MMT. Soybean production growth was driven by growing demand of livestock and poultry industries in protein feeds. Historically, soybeans have been grown predominantly in the Far East. In the beginning of 2000s, along with the development of the poultry industry in the European Russia, soybean production increased in the Southern European Russia. However, competition for fertile soil in European Russia is high, and the Far East has greater potential for soybean production growth. Rapeseeds FAS/Moscow forecasts rapeseed production in MY 2012/13 to decrease by almost 15 percent to 0.9 MMT. High-yielding winter rapeseed production is concentrated in Southern European Russia, and especially in Stavropol kray, and industry analysts estimate that winter rapeseeds have been negatively affected by winter frosts. This is expected to significantly reduce yields. Meanwhile, area sown to spring rapeseeds is expected to decrease in MY 2012/13 as many farmers consider rapeseed a difficult crop for harvesting and transporting. Rapeseed is primarily produced as a result of demand from Europe for biofuels. Other oilseed crops Production of other oilseeds such as linseeds for oil is expected to continue to grow in 2012, due to the profitability of these crops. In 2011, Russian farmers increased area sown to other oilseed crops, such as linseed, mustard, wild flax, and some others to 0.7 million hectares, and the total production of these crops in MY 2011/12 increased to 0.6 MMT (including 0.5 MMT of linseeds). Farmers? interest has been based on absence of export duties on these oilseeds, except mustard. Besides, some crushers found foreign niche markets for oil and products made from these oilseeds, especially linenseeds. In fact, in 2011 Russia exported 250,000 MT of linseed, including 17,500 to the United States. Since production of linseeds for oil has become profitable for farmers, they may increase area sown to this and some other oilseed crops in 2012. Oilseed Consumption: Industry analysts estimate Russia?s oilseeds crushing capacity in 2011 at 13 MMT, and forecast its further growth to 15 MMT in MY 2012/13. Processing of oilseeds is increasingly concentrated at modern, new crushing plants owned by large agro-holding companies, while crushing at small plants is decreasing. Sunflowerseeds Assuming that the sunflowerseed crop in 2012 will decrease by 1.2 MMT, FAS/Moscow forecasts sunflowerseed crush in MY 2012/13 to fall by 0.3 MMT to 7.7 MMT. Crush in 2011 had reached a record level as a result of the huge crop and strong demand. A larger decrease in crush in MY 2012/13 is not likely, as oilseed crushing remains a profitable and attractive business for large agro-holding companies, and crushing capacity continues to grow. The forecast volumes of crushing is expected to allow Russia to produce 2.8 MMT of sunflowerseed meal and 3.1 MMT of sunflowerseed oil. Soybeans Demand for soybean meal and cake is growing in Russia due to stronger needs from the poultry industry and recovering swine breeding and dairy industries. Along with growing demand, soybean crushing facilities also are expanding, and the major Russian soybean crusher - Sodruzhestvo in Kaliningrad - is planning to add another crushing plant to expand their present soybean crushing capacity from approximately 1.1 MMT a year to almost 3 MMT. FAS/Moscow forecasts soybean crush to increase from 2.5 MMT in MY 2011/13 to 2.8 MMT in MY 2012/13. Rapeseed Rapeseed consumption will be driven by the EU demand for use in biofuels, since most of Russia?s rapeseed oil is exported. Rapeseed crush in MY 2012/13 is forecasted at 0.8 MMT, only slightly below MY 2011/12. Other Oilseeds Consumption of other oilseeds is relatively small in Russia, but has been growing in the last 2 years. Russian farmers increased production of linseed both for exports, since these seeds are not subject to export duties, and for crushing for oil, which is exported as niche product to some foreign markets. Oilseed Trade: Trade in Sunfloweseeds In MY 2011/12 Russia increased exports of sunflowerseeds despite high export duties as production was high and domestic prices were low. In September 2011 ? February 2012 Russia exported 135,000 MT of sunflowerseeds, 87 percent of which were shipped to Turkey. FAS/Moscow estimates sunflowerseed exports to fall in 2012/13 to 200,000 MT, from 350,000 MT in MY 2011/12. This decrease is due to a smaller crop, increasing crushers? demand, and high export duties. In accordance with Russia?s WTO commitments, export duties on sunflowerseeds must be reduced from 20 percent (but not less than 35 Euro per MT) to 6.5 percent (but not less than 9.75 Euro per MT) within in 4 years after Russia?s WTO accession. These reductions are supposed to occur in equal installments. In the long term these changes will likely boost exports of sunflowerseeds at the expense of sunflower meal. Trade in Soybeans Soybean exports are expected to increase to 100,000 MT in MY 2012/13 and in the longer term will likely continue to grow. At the beginning of March 2012, Deputy Prime Minister Viktor Zubkov reported that because of the large soybean crop in 2011, the government plans to cut the export duty on soybeans to 5 percent from 20 percent for a period until October 1, 2012. The minimum duty level will be reduced to 8.50 Euro per MT from 35 Euro. Industry analysts report that shortly after this announcement soybeans prices in the Far East increased by 12 percent. In accordance with WTO commitments, all export duties on soybeans will be eliminated within 3 years of accession and these reductions are supposed to occur in equal installments. The removal of export duties will likely boost trade with China, and encourage increased production in the Russian Far East. Despite increased exports, Russia will continue to remain a large importer of soybeans as the main producing area in the Far East is 3,700 miles away from the primary soybean crusher in Kaliningrad (or more than the distance between Atlanta and Anchorage). Imports of soybeans are forecast to increase to 1.2 MMT in MY 2012/13 from 0.8 MMT in MY 2011/12. A further increase in imports in the next few years is also expected after Sodruzhestvo?s new crushing plant starts working at full capacity. Trade in Rapeseeds Rapeseed exports are forecast to decrease as rapeseeds are difficult to transport, and farmers will more likely sell to crushing plants for exports of rapeseed oil. After WTO accession, export duties on rapeseeds will decrease from 20 percent (but not less than 35 Euro per MT) to 6.5 percent (but not less than 11.4 Euro per MT) within in 3 years after Russia?s WTO accession. These reductions are supposed to occur in equal installments. Despite these changes, it is expected that most rapeseeds will still be crushed domestically and oil exportered due to transportation difficulties of the seeds. Table 5. Decrease in Oilseed Export Duties under WTO Commitmenst HS Name of Current exports duty Target export duty Transitional Number Product Period 1201 Soybean 20 percent, but not less 0 3 years than 35 Euro per 1 MT 1205 Rapeseed 20 percent, but not less 6.5 percent, but not less 3 years than 35 Euro per 1 MT than 11.4 Euro per 1 MT 1206 Sunflowerseed 20 percent, but not less 6.5 percent, but not less 4 years than 30 Euro per 1 MT than 9.75 Euro per 1 MT 1207 50 Mustard seed 10 percent, but not less 0 1 year than 25 Euro per 1 MT Recently GOR issued a Resolution #88 of February 6, 2012 that confirmed the current export duties (export duties on commodities exported from the Russian Federation to the non-CU countries) on soybeans, sunflowerseeds, rapeseed and mustard. The expected exempt for soybeans will be temporary, and will last, as announced until October 1, 2012. Policy: The Russian government has adopted several programs directly or indirectly targeted at improvement of the oilseeds industry, such as the Program on Development of Rapeseeds, Program on Development of the Soybean Industry, and Program on the Development of the Feed Industry. However, the financing of these programs is small, and farmers may benefit from government support that applies to all crop production (fuel and fertilizer price discounts, soft term-loans) more than from the above listed programs. However, grain still remains the priority in the Russian government policy, especially when it comes to policies of provincial administrations. Sunflowseeds have been profitable for farmers but at the local level agricultural administrations have warned and tried to discourage farmers from expanding area sown to sunflowerseeds due to disease and soil fertility concerns from farmers planting sunflowerseeds too close together in the crop rotations. In 2011/12 the Russian government has increase indirect support of soybean producers by introducing in the end of 2011 a 0.5 coefficient for railway tariffs for shipping soybeans from the Far East to Siberia and European Russia. Import of soybeans, peanuts and sesame to Russia are duty-free. Imports of other oilseeds are subject to 5 percent import duty. The import requirements and tariffs can be found on the site of the Russia Customs Service: www.tks.ru . Production, Supply and Demand Data Statistics: Table 6. PSD Sunflowerseed Oilseed, Sunflowerseed Russia 2010/2011 2011/2012 2012/2013 Market Year Begin: Sep 2010 Market Year Begin: Sep 2011 Market Year Begin: Sep 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 5,200 5,200 5,200 7,615 7,000 Area Harvested 5,550 5,560 7,200 7,235 7,000 Beginning Stocks 283 283 130 130 637 Production 5,350 5,350 9,627 9,697 8,500 MY Imports 42 42 10 10 10 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 5,675 5,675 9,767 9,837 9,147 MY Exports 10 10 500 350 200 MY Exp. to EU 0 5 0 5 10 Crush 5,045 5,045 7,800 8,000 7,700 Food Use Dom. Cons. 200 200 280 300 300 Feed Waste Dom. Cons. 290 290 520 550 500 Total Dom. Cons. 5,535 5,535 8,600 8,850 8,500 Ending Stocks 130 130 667 637 447 Total Distribution 5,675 5,675 9,767 9,837 9,147 1000 HA, 1000 MT Table 7. PSD Soybean Oilseed, Soybean Russia 2010/2011 2011/2012 2012/2013 Market Year Begin: Sep 2010 Market Year Begin: Sep 2011 Market Year Begin: Sep 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 1,050 1,205 1,200 1,230 1,300 Area Harvested 1,036 1,035 1,180 1,180 1,150 Beginning Stocks 91 91 112 112 88 Production 1,222 1,222 1,749 1,756 1,800 MY Imports 1,000 1,001 800 800 1,200 MY Imp. from U.S. 27 27 25 50 150 MY Imp. from EU 0 0 0 0 0 Total Supply 2,313 2,314 2,661 2,668 3,088 MY Exports 1 2 10 50 100 MY Exp. to EU 0 0 0 0 0 Crush 2,170 2,170 2,400 2,500 2,800 Food Use Dom. Cons. 0 0 0 0 0 Feed Waste Dom. Cons. 30 30 65 30 30 Total Dom. Cons. 2,200 2,200 2,465 2,530 2,830 Ending Stocks 112 112 186 88 158 Total Distribution 2,313 2,314 2,661 2,668 3,088 1000 HA, 1000 MT Table 8. PSD, Rapeseed Oilseed, Rapeseed Russia 2010/2011 2011/2012 2012/2013 Market Year Begin: Jul 2010 Market Year Begin: Jul 2011 Market Year Begin: Jul 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 650 650 850 890 800 Area Harvested 612 612 840 840 750 Beginning Stocks 94 94 98 98 154 Production 670 670 1,050 1,055 900 MY Imports 1 1 1 1 0 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 1 1 1 1 0 Total Supply 765 765 1,149 1,154 1,054 MY Exports 41 41 150 100 50 MY Exp. to EU 40 40 40 90 50 Crush 610 610 825 850 825 Food Use Dom. Cons. 0 0 0 0 0 Feed Waste Dom. Cons. 16 16 17 50 25 Total Dom. Cons. 626 626 842 900 850 Ending Stocks 98 98 157 154 154 Total Distribution 765 765 1,149 1,154 1,054 1000 HA, 1000 MT Table 9. PSD, Peanut Oilseed, Peanut Russia 2010/2011 2011/2012 2012/2013 Market Year Begin: Oct 2013 Market Year Begin: May 2011 Market Year Begin: Oct 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 0 0 0 0 0 Area Harvested 0 0 0 0 0 Beginning Stocks 8 8 8 8 8 Production 0 0 0 0 0 MY Imports 138 132 130 135 135 MY Imp. from U.S. 15 15 15 15 15 MY Imp. from EU 0 0 0 0 0 Total Supply 146 140 138 143 143 MY Exports 0 0 0 0 0 MY Exp. to EU 0 0 0 0 0 Crush 0 0 0 0 0 Food Use Dom. Cons. 138 132 130 135 135 Feed Waste Dom. Cons. 0 0 0 0 0 Total Dom. Cons. 138 132 130 135 135 Ending Stocks 8 8 8 8 8 Total Distribution 146 140 138 143 143 1000 HA, 1000 MT Commodities: Meal, Sunflowerseed Meal, Soybean Meal, Rapeseed Meal, Fish Meal Production: After a huge jump in oilseed meal production in MY 2011/12, FAS/Moscow forecasts only a slight increase in oilseed meal production to 5.6 MMT in MY 2012/13 (from 5.5 MMT in 2011/12 and 4.0 in 2010/11). This increase is due to higher production of soybean meal to 2.2 MMT, while production of sunflowerseed meal is forecast to decrease slightly by 0.1 MMT to 2.8 MMT. Meal Consumption: Domestic demand for protein feeds and feed preparations is getting stronger along with the development of poultry and livestock industries in Russia, and the increasing concentration of poultry, meat and milk production at large industrial complexes. These operations use more compound feeds with high protein content than smaller scale operations or private households. For more information on the demand in feeds and on the development of feed industry see GAIN report RS1217 _ Russian Feed Sector Continues to Develop but Obstacles remain _ Moscow _ Russian Federation _ 3/14/2012. FAS/Moscow forecasts that Russia?s total domestic consumption of the three major oilseed meals (sunflowerseed, soybean and rapeseed meal) will increase to 4.8 MMT in MY 2012/13 compared with 4.5 MMT in MY 2011/12. Meal Trade: 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. Meanwhile, domestic poultry producers and other consumers of protein feeds prefer purchasing soybean meal, either domestic or imported. FAS/Moscow forecasts sunflowerseed meal exports in MY 2012/13 at 1.1 MMT, only a slight decrease from the previous year. Imports of soybean meal are forecasted to remain steady at 0.6 MMT in MY 2012/13. The import duty on soybean meal remains 5 percent despite the continued efforts of domestic poultry producers to lobby for its removal. However, with Russia?s WTO accession, soybean meal import duties are required to immediately fall to zero. Meanwhile, rapeseed meal import duties are also required to fall with WTO accession from 5 percent to zero by 2013. Policy: The government program on the Development of the Feed Industry will continue through 2014, and envisages increased production of protein feeds such as soybean meal. However, financing of this program is low and the development of the feed industry is driven by growing poultry and livestock industry demand rather than by direct government support of soybean meal production. Production, Supply and Demand Data Statistics: Table 10. PSD, Sunflowerseed Meal Meal, Sunflowerseed Russia 2010/2011 2011/2012 2012/2013 Market Year Begin: Sep 2010 Market Year Begin: Sep 2011 Market Year Begin: Sep 2012 USDA Official New Post USDA Official New Post USDA Official New Post Crush 5,045 5,045 7,800 8,000 7,700 Extr. Rate, 999.9999 0 0 0 0 0 Beginning Stocks 204 204 53 53 155 Production 1,874 1,874 2,902 2,902 2,800 MY Imports 17 17 5 0 0 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 2,095 2,095 2,960 2,955 2,955 MY Exports 583 583 1,200 1,200 1,100 MY Exp. to EU 0 0 0 0 0 Industrial Dom. Cons. 0 0 0 0 0 Food Use Dom. Cons. 0 0 0 0 0 Feed Waste Dom. Cons. 1,459 1,459 1,686 1,600 1,700 Total Dom. Cons. 1,459 1,459 1,686 1,600 1,700 Ending Stocks 53 53 74 155 155 Total Distribution 2,095 2,095 2,960 2,955 2,955 1000 MT, PERCENT Table 11. PSD, Soybean Meal Meal, Soybean Russia 2010/2011 2011/2012 2012/2013 Market Year Begin: Sep 2010 Market Year Begin: Sep 2011 Market Year Begin: Sep 2012 USDA Official New Post USDA Official New Post USDA Official New Post Crush 2,170 2,170 2,400 2,500 2,800 Extr. Rate, 999.9999 1 1 1 1 1 Beginning Stocks 82 82 36 36 81 Production 1,708 1,708 1,891 1,995 2,200 MY Imports 455 455 350 600 600 MY Imp. from U.S. 46 46 30 50 50 MY Imp. from EU 130 130 150 130 130 Total Supply 2,245 2,245 2,277 2,631 2,881 MY Exports 28 28 30 50 100 MY Exp. to EU 0 0 0 0 0 Industrial Dom. Cons. 0 0 0 0 0 Food Use Dom. Cons. 0 0 0 0 0 Feed Waste Dom. Cons. 2,181 2,181 2,190 2,500 2,700 Total Dom. Cons. 2,181 2,181 2,190 2,500 2,700 Ending Stocks 36 36 57 81 81 Total Distribution 2,245 2,245 2,277 2,631 2,881 1000 MT, PERCENT Table 12. PSD, Rapeseed Meal Meal, Rapeseed Russia 2010/2011 2011/2012 2012/2013 Market Year Begin: Jul 2010 Market Year Begin: Jul 2011 Market Year Begin: Jul 2012 USDA Official New Post USDA Official New Post USDA Official New Post Crush 610 610 825 850 825 Extr. Rate, 999.9999 1 1 1 1 1 Beginning Stocks 0 0 0 0 0 Production 364 364 492 495 480 MY Imports 0 0 0 0 0 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 364 364 492 495 480 MY Exports 151 151 200 200 190 MY Exp. to EU 85 85 85 90 90 Industrial Dom. Cons. 0 0 0 0 0 Food Use Dom. Cons. 0 0 0 0 0 Feed Waste Dom. Cons. 213 213 292 295 290 Total Dom. Cons. 213 213 292 295 290 Ending Stocks 0 0 0 0 0 Total Distribution 364 364 492 495 480 1000 MT, PERCENT Table 13. PSD, Fish Meal Meal, Fish Russia 2010/2011 2011/2012 2012/2013 Market Year Begin: Oct 2010 Market Year Begin: Oct 2011 Market Year Begin: Oct 2012 USDA Official New Post USDA Official New Post USDA Official New Post Catch For Reduction 525 525 525 550 525 Extr. Rate, 999.9999 0 0 0 0 0 Beginning Stocks 3 3 3 3 3 Production 135 135 135 135 135 MY Imports 53 53 65 65 65 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 191 191 203 203 203 MY Exports 50 50 55 55 55 MY Exp. to EU 0 0 0 0 0 Industrial Dom. Cons. 0 0 0 0 0 Food Use Dom. Cons. 0 0 0 0 0 Feed Waste Dom. Cons. 138 138 145 145 145 Total Dom. Cons. 138 138 145 145 145 Ending Stocks 3 3 3 3 3 Total Distribution 191 191 203 203 203 1000 MT, PERCENT Commodities: Oil, Sunflowerseed Oil, Soybean Oil, Rapeseed Oil, Palm Oil Production: Sunflowerseed oil Sunflowerseed oil remains the major vegetable oil in Russian and comprises approximately 65 percent of domestic consumption. FAS/Moscow forecasts that sunflowerseed oil production in MY 2012/13 may decrease slightly by 0.1 MMT to 3.1 MMT due to lower sunflowerseed production. However, this decrease is expected to result in lower exports, with domestic consumption remaining largely the same. FAS/Moscow estimates sunflowerseed oil production in MY 2011/12 at 3.2 MMT. Russia?s state Statistical Service (Rosstat) has changed the parameters of reported vegetable oil production several times in the last 3 years, and does not include vegetable oil production at small plants and on-farm crushing operations. The role of small crushers is decreasing, but they still produce a large portion of sunflowerseed oil for local consumers and for farmers? own consumption. According to Rosstat, production of crude sunflowerseed oil at large enterprises in September 2011 ? February 2012 was 1.8 MMT, or 48 percent more than in September 2010 ? February 2011. Assuming that in the next 6 months of MY 2011/12 Russia?s major crushers will be producing sunflowerseeds in volumes close to the 3 years average, sunflowerseed oil production at major crushing plants may reach 3.0-3.1 MMT, also approximately 48 percent more than in the MY 2010/11. Table 14. Vegetable Oil Production at Industrial Plants, MYs 2010/11 and 2011/12, 1,000 MT MY 2010/11 MY 2011/12 (est.) Total Sunseed Oil Total Sunseed Oil Sep. 251 203 216 170 Oct. 310 250 384 337 Nov. 323 255 394 352 Dec. 303 220 417 371 Jan. 176 142 365 310 Feb. 202 160 336 292 Mar. 230 170 260 232 Apr. 193 160 241 217 May 193 155 236 213 Jun. 193 150 239 216 Jul. 210 130 218 182 Aug 189 124 197 147 MY Total 2,773 2,119 3,502 3,039 Sources: Rosstat data for sunflowerseed oil (crude), SovEcon data for total vegetable oil, FAS/Moscow estimates for March-August 2012. Other vegetable oils Production of soybean oil is increasing along with the 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 continue to prefer sunflowerseed oil to soybean oil. FAS/Moscow estimates soybean oil production in MY 2011/12 at 4440,000 MT, and forecasts its increase in MY 2012/13 to 0.5 MMT. Production of rapeseed oil is estimated at 330,000 MT in MY 2012/13, and the same volumes are forecast for MY 2012/13. Oil Consumption: Russia?s per-capita vegetable oil consumption (food and industrial) is estimated at approximately 24 liters per capita per year, and this is still lower than in Europe and in the United States. However, food use domestic consumption has been stable and is not forecast to increase in MY 2012/13, while industrial consumption may continue increasing along with the development of Russia?s food industry. Table 15. Supply and Consumption of Vegetable Oil, MYs 2006/07 ? 2012/13, 1,000 MT MY MY MY MY MY MY MY 2011/12 2012/13 2006/07 2007/08 2008/09 2009/10 2010/11 (est) (forecast) Total Supply 3,298 3,861 4,085 3,960 3,779 4,891 4,885 - Sunflowerseeds Oil 2,260 2,384 2,779 2,619 2,330 3,339 3,279 - Soybean Oil 157 308 366 379 416 490 560 - Rapeseed Oil 168 196 264 282 260 334 345 - Palm Oil 524 739 517 526 610 609 579 - Coconut Oil 175 215 145 128 130 87 90 - Olive Oil 10 11 9 16 23 22 22 - Other Vegetable Oil 4 8 5 10 10 10 10 Exports Total 772 359 1,020 764 454 1,451 1,370 - Sunflowerseeds Oil 710 321 802 504 213 1,100 1,000 - Soybean Oil 5 10 127 170 145 150 170 - Rapeseeds Oil 55 27 89 88 94 200 200 - Palm Oil 1 0 1 1 1 0 0 - Coconut Oil 0 0 0 0 0 0 0 - Olive Oil 0 0 0 0 0 0 0 - Other Vegetable Oil 1 1 1 1 1 1 0 Consumption and Stocks 2,526 3,502 3,065 3,196 3,325 3,440 3,515 - Sunflowerseeds Oil 1,550 2,063 1,977 2,115 2,117 2,239 2,279 - Soybean Oil 152 298 239 209 271 340 390 - Rapeseeds Oil 113 169 175 194 166 134 145 - Palm Oil 523 739 516 525 609 609 579 - Coconut Oil 175 215 145 128 130 87 90 - Olive Oil 10 11 9 16 23 22 22 - Other Vegetable Oil 3 7 4 9 9 9 10 Oil Trade: FAS/Moscow forecasts sunflowerseed oil exports in MY 2012/13 to decrease by 0.1 MMT to 1.0 MMT. Exports in MY 2011/12 reached a record and in September 2011? February 2012 Russia has already exported over 530,000 MT of sunflowerseed oil, including 431,600 MT of crude vegetable oil and almost 88,700 MT of refined sunflowerseed oil. Crude sunflowerseed oil was exported to over 20 countries, and the major markets for crude oil were Turkey (182,200 MT), Egypt (120,100 MT), and Italy (31,500 MT). Refined sunflowerseed oil was exported primarily the CIS countries and some other neighbor countries. The major markets for Russia?s refined sunflowerseed oil were Uzbekistan (41,600 MT), Kyrgyzstan (11,500 MT) and Tajikistan (7,700 MT). Imports of sunflowerseed oil, mostly from Ukraine, do not exceed 30,000 ? 50,000 MT a year. Soybean oil imports are low and do not exceeed 10,000 MT a year. For exports, after construction of the major soybean crushing complex in Kaliningrad, Russia began exporting soybean oil. In September 2011? February 2012 Russia exported 61,400 MT of soybean oil and the major markets for Russian soybean oil were France (15,100 MT), Uzbekistan (13,700 MT), and the United Kingdom (10,500 MT). Russia?s total soybean oil exports in MY 2012/13 are estimated at 150,000 MT, the same as in 2011/12 but will likely rise in the future when increased crushing capacity in Kaliningrad comes on-line. While there is strong demand for soybean meal in Russia, this is not the case for oil and hence the exports. Rapeseed oil exports have been increasing since 2007, along with growing European demand for use in biofuels. FAS/Moscow forecasts MY 2012/13 exports at 200,000 MT, the same as 2011/12. In July 2011 ? February 2012 these exports reached 165,000 MT. In the last 5-6 years Russia has become one of the largest importers of palm oil. FAS/Moscow forecasts some decrease in palm oil imports in MY 2012/13 to 530,000 MT (from 560,000 MT in MY 2011/12) due to the possible prohibitions of the use of palm oil in products that are called ?dairy?, if the Custom Union?s technical regulation on milk and dairy products is adopted in the currently discussed format. In October 2011-February 2012 Russian imported 233,000 MT of palm oil. Policy: Russia regulates production of vegetable oils by the safety and quality requirements 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: http://www.tsouz.ru/db/techreglam/Documents/TR%20TS%20MasloGirov.pdf . Russia?s trade policy also influences the domestic vegetable oils market. Vegetable oils are exported duty-free and import tariffs on vegetable oil vary for different oils. Updated information on import tariffs on different vegetable oils is available on the web-site http://www.tks.ru/db/tnved/tree. Import tariffs on vegetable oils for industrial processing are lower than tariffs on imports of vegetable oil for packaging and for direct human consumption. Thus, import duty on sunflowerseed oil for non-food industrial consumption is 15 percent, and for oil imported for food consumption imported in packs of 10 liters and less the import duty is 15 percent, but not less than 0.14. Import duty on soybean oil is 15 percent, and for soybean oil imported in packs of 10 liters and less the import duty is 15 percent, but not less than0.14 euro per 1 kg. The significant exception in tariffs was made for palm oil. At present imports of palm oil for industrial consumption (HS code 1511 101 000) is duty-free. Import duty for palm oil not-for-industrial consumption in 20 MT?s and less packages is 400 Euro per MT. Import duty for the same oil in packages over 20 MT is duty-free. Import tariffs for some oils will be reduced slightly with WTO accession. Production, Supply and Demand Data Statistics: Table 16. PSD, Sunflowerseed Oil Oil, Sunflowerseed Russia 2010/2011 2011/2012 2012/2013 Market Year Begin: Sep 2010 Market Year Begin: Sep 2011 Market Year Begin: Sep 2012 USDA Official New Post USDA Official New Post USDA Official New Post Crush 5,045 5,045 7,800 8,000 7,700 Extr. Rate, 999.9999 0 0 0 0 0 Beginning Stocks 99 99 109 109 149 Production 2,082 2,082 3,221 3,200 3,100 MY Imports 149 149 70 30 30 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 2,330 2,330 3,400 3,339 3,279 MY Exports 180 180 1,100 1,100 1,000 MY Exp. to EU 25 25 500 500 500 Industrial Dom. Cons. 330 330 350 350 350 Food Use Dom. Cons. 1,681 1,681 1,750 1,700 1,700 Feed Waste Dom. Cons. 30 30 40 40 40 Total Dom. Cons. 2,041 2,041 2,140 2,090 2,090 Ending Stocks 109 109 160 149 189 Total Distribution 2,330 2,330 3,400 3,339 3,279 1000 MT, PERCENT Table 17. PSD, Soybean Oil Oil, Soybean Russia 2010/2011 2011/2012 2012/2013 Market Year Begin: Sep 2010 Market Year Begin: Sep 2011 Market Year Begin: Sep 2012 USDA Official New Post USDA Official New Post USDA Official New Post Crush 2,170 2,170 2,400 2,500 2,800 Extr. Rate, 999.9999 0 0 0 0 0 Beginning Stocks 5 5 40 40 60 Production 389 389 430 440 490 MY Imports 21 21 15 10 10 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 10 10 10 10 10 Total Supply 415 415 485 490 560 MY Exports 135 135 150 150 170 MY Exp. to EU 130 130 120 120 140 Industrial Dom. Cons. 30 30 30 30 55 Food Use Dom. Cons. 210 210 247 250 260 Feed Waste Dom. Cons. 0 0 0 0 0 Total Dom. Cons. 240 240 277 280 315 Ending Stocks 40 40 58 60 75 Total Distribution 415 415 485 490 560 1000 MT, PERCENT Table 18. PSD, Rapeseed Oil Oil, Rapeseed Russia 2010/2011 2011/2012 2012/2013 Market Year Begin: Jul 2010 Market Year Begin: Jul 2011 Market Year Begin: Jul 2012 USDA Official New Post USDA Official New Post USDA Official New Post Crush 610 610 825 850 825 Extr. Rate, 999.9999 0 0 0 0 0 Beginning Stocks 20 20 3 3 14 Production 239 239 323 330 330 MY Imports 1 1 1 1 1 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 260 260 327 334 345 MY Exports 94 94 140 200 200 MY Exp. to EU 95 65 90 150 150 Industrial Dom. Cons. 30 30 20 20 20 Food Use Dom. Cons. 133 133 148 100 110 Feed Waste Dom. Cons. 0 0 0 0 0 Total Dom. Cons. 163 163 168 120 130 Ending Stocks 3 3 19 14 15 Total Distribution 260 260 327 334 345 1000 MT, PERCENT Table 19. PSD, Palm Oil Oil, Palm Russia 2010/2011 2011/2012 2012/2013 Market Year Begin: Oct 2010 Market Year Begin: Oct 2011 Market Year Begin: Oct 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 0 0 0 0 0 Area Harvested 0 0 0 0 0 Trees 0 0 0 0 0 Beginning Stocks 10 10 64 49 49 Production 0 0 0 0 0 MY Imports 655 610 560 560 530 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 665 620 624 609 579 MY Exports 1 1 0 0 0 MY Exp. to EU 0 0 0 0 0 Industrial Dom. Cons. 135 120 120 130 120 Food Use Dom. Cons. 465 450 464 430 410 Feed Waste Dom. Cons. 0 0 0 0 0 Total Dom. Cons. 600 570 584 560 530 Ending Stocks 64 49 40 49 49 Total Distribution 665 620 624 609 579 1000 HA, 1000 TREES, 1000 MT
Posted: 21 April 2012

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