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August 2, 18:29 Source: APK-Inform Views: 482

Russian soybean market – current condition and prospects

Rapid development of the industry of soybean production in Russia, and the potential for its further improvement, cause intense interest of the wide audience of market participants in the oilseed.

Development of the soybean production in Russia is one of the most important motivating factors for the operation and improvement of other related industries: oil-producing, fat-and-oil, forage producing, livestock, food, various commercial industries, and foreign trade.


Position of Russia on the world soybean market

To date the industry of soybean production in Russia is one of the very prospective and rapidly developing ones, which is evidenced by the trend of increasing of soybean production through growing of its planted areas, and improvement of agricultural technologies, observed in some recent years.

According to the USDA data, Russia is among the TOP-10 of the countries-leaders by planted areas of soybeans in the world, Russia covers nearly 1% of the general areas of the oilseed cultivation in the world. It should be noted that 10 years ago the share of Russia did not exceed 0.6%. Generally, in the period from 2004/05 MY to the current season the soybean planted areas in Russia increased by 3 times - to 1.5 mln ha.

Also, during recent years there was observed the positive trend in changing of soybean yield, which during the same 10 years increased by 36% - to 1.36 t/ha.

However, soybean yield indices in Russia are still behind the results of the largest countries-producers of the oilseed. Thus, in the current season the average soybean yield in the Russian Federation is more than two times lower compared with the USA and Argentina, and down 2.2 times compared with Brazil. At the same time, the yield of Russian soybeans is not the lowest one in the world, for example, in India the oilseed yield in the current season totals 0.9 t/ha, which is slightly lower than in Russia (1.36 t/ha).

 


 


 

During the observed 10-year period the general harvest volumes of soybeans in Russia increased from the level of 555 thsd tonnes (in 2004/05 MY) to 1.6 mln tonnes in the current season. But despite the positive trend of production, the share of Russia in the global soybean production does not exceed 1%, which is fairly low rate. At the same time, during several recent years there is observed a low-scale increase of the Russian share on the world market. In the current season the country occupies the 11th position in terms of soybean production in the world.

 

ТОР-15 of the world soybean producers, `000 tonnes

 

 

 

Country

2011/12

2012/13

2013/14

2014/15*

Changes of 2014/15 to 2013/14

 
 

1

USA

84 192

82 561

89 507

98 929

11%

 

2

Brazil

66 500

82 000

87 500

91 000

4%

 

3

Argentina

40 100

49 300

54 000

54 000

0%

 

4

China

14 485

13 050

12 200

12 000

-2%

 

5

India

11 000

11 500

11 000

12 000

9%

 

6

Paraguay

4 043

8 300

8 100

8 200

1%

 

7

Canada

4 298

5 086

5 200

6 100

17%

 

8

Uruguay

2 726

3 650

3 500

3 400

-3%

 

9

Ukraine

2 196

2 338

2 663

3 360

26%

 

10

Bolivia

2 320

2 660

2 310

2 500

8%

 

11

Russia

1 756

1 806

1 636

2 259

38%

 

12

EU-28

1 220

948

1 232

1 425

16%

 

13

South Africa

650

785

868

920

6%

 

14

Indonesia

620

600

620

620

0%

 

15

Nigeria

564

450

450

450

0%

 

 

Others

2 855

2 819

3 001

2 832

-6%

 

 

Total

239 525

267 853

283 788

299 995

6%

 

* Forecast

 

Sources: USDA (June 2014), APK-Inform Agency

 

 

Due to increasing of soybean production, Russia managed to considerably strengthen its positions on the global market. According to the USDA, in the current season Russia closes the TOP-10 of the countries-leaders by soybean exports. According to APK-Inform data, in the current season soybean exports from Russia will reach 50 thsd tonnes, while in 2009/10 MY the oilseed shipments on foreign markets totaled 105 tonnes only. However, the share of Russia in the global exports of the oilseed is quite low - less than 1%. The Far Eastern District is the most export-oriented region of Russia: the region exports most of the produced oilseed volumes to China.

Russian soybean is more focused on domestic processing than the export market: for example, more than 90% of the available contracts in the country fall on soybean domestic consumption.

Generally, despite the positive dynamics of soybean exports, Russia still remains a net importer of the oilseed, its import volume significantly exceeds the volume of its deliveries on foreign markets.

 

Conditionoftheproductionindustry

During 10 recent years there is observed an increase of the planted areas of major oilseeds in almost 2 times (from 5.7 mln ha to 10.1 mln ha). It is worth noting that all three major oilseeds – sunflower seed, rapeseed and soybeans – increased its planted areas.

In the structure of distribution of the planted areas of oilseeds in Russia, sunflower seed occupies the major share - nearly 72% of the general areas under oilseeds in 2013, the share of rapeseed - 13%, while the share of soybeans - 15%.

 

 

As for the production of major oilseeds, it should be noted that, despite the fact that sunflower seed is the main oilseed crop produced in Russia, its share in the general production continues decreasing during 10 recent years, thus increasing the shares of rapeseed and soybeans.

The soybean market in Russia can be called as the most dynamic one. During recent years there was observed the steadily increasing production indices of the oilseed. Thus, in 2004 the soybean harvest totaled 555 thsd tonnes, in 2012 Russia produced the record volumes of 1.8 mln tonnes, and in 2013 – 1.6 mln tonnes. It is worth noting that during 7 recent years the soybean production increased annually. At the same time, in 2013 the planted areas also broke the record - 1.5 mln ha. The record soybean yield was observed in 2011 (1.48 t/ha). In 2013 the soybean yield totaled 1.36 t/ha.

 

 

As for the main soybean growing regions in Russia, it should be noted that the planted areas are mainly located in the Far Eastern Federal District (in 2013 61% of the general soybean areas in the Russian Federation). Also, soybean areas are concentrated in such regions as the Central and Southern Federal Districts, last year there were located 20% and 12% of the oilseed areas, respectively.

Thus, the Far Eastern, Central and Southern Federal Districts cover more than 90% of the general areas of the oilseed in Russia.

 

Rating of the Federal Districts by areas, yield and production volumes of soybeans in Russia in 2013

 

Districts

Planted areas, `000 ha

Districts

Yield, c/ha

Districts

Production, `000 tonnes

1

Far Eastern

935,0

Southern

19,7

Far Eastern

646,8

2

Central

308,5

Central

16,9

Central

505,0

3

Southern

180,0

North Caucasian

15,5

Southern

342,5

4

Volga

52,0

Volga

14,6

Volga

71,3

5

North Caucasian

29,4

Ural

11,9

North Caucasian

44,3

6

Siberian

20,8

Far Eastern

10,3

Siberian

20,2

7

Ural

5,7

Siberian

10,2

Ural

6,0

8

Northwestern

0,5

Northwestern

5,5

Northwestern

0,2

 

Russia

1 531,8

Russia

13,6

Russia

1 636,3

Source: Rosstat

 

According to analysts of APK-Inform Agency, in 2014 the planted areas of soybeans will reach its record of 1.72 mln ha, which will exceed the last year record by 12%. The planted areas will grow due to the increased demand for the oilseed and its by-products, on both the domestic and export markets. In the current season the soybean yield is expected to reach 1.43 t/ha, against 1.36 t/ha in 2013. Thus, the general harvest of the oilseed in 2014 is forecasted at 2.3 mln tonnes, up 38% compared with last year.

 

Forecast of APK-Inform Agency on soybean harvest in 2014

 

2013

2014*

Changes of 2014 to 2013

Planted areas, `000 ha

1 531,8

1 715,6

12%

Harvested areas, `000 ha

1 203,1

1 575,7

31%

Yield, c/ha

13,6

14,3

5%

Production, `000 tonnes

1 636,3

2 259,1

38%

* Forecast of APK-Inform Agency

 

 

 

Source: Rosstat

 

 

 

 

Supply and demand balances of soybeans in Russia, `000 tonnes

 

 

 

 

2011/12

2012/13

2013/14*

2014/15*

Beginning stocks

140,3

146,9

72,2

108,4

Production (in clean weight)

1 756,0

1 806,2

1 636,3

2 259,1

Imports

740,5

716,6

1 400,0

930,0

Total supply

2 636,8

2 669,6

3 108,4

3 297,6

Domestic consumption

2 400,0

2 500,0

2 950,0

3 000,0

including processing at oil

1 762,3

1 981,0

2 688,8

2 715,9

Exports

89,9

97,5

50,0

170,0

General distribution

2 489,9

2 597,5

3 000,0

3 170,0

Ending stocks

146,9

72,2

108,4

127,6

* Forecast of APK-Inform Agency

 

 

 

 

Sources: Rosstat, APK-Inform Agency

 

 

 

 

 

Domesticprocessing

During several recent years the Russian fat-and-oil industry is dynamic developing industry sector. To date nearly 90% of the produced oilseed are focused for the domestic processing.

 

 

 

During several recent seasons the list of TOP-5 soybean processors includes the following companies: Sodrugestvo-soya CJSC, Irkutsk Fat-and-Oil Plant OJSC, Amuragrocenter JSCO, Primorskaya soya Fat-and-Oil Plant CJSC, and OJSC EFKO (Alekseyevka).

 

 

Main directions ofsoybean exports / imports

Despite the fact that in during recent seasons there is observed an increase of soybean export volumes, the oilseed is primarily the import-oriented one. Russia remains quite stable while selecting suppliers of the oilseed to the country. So, during several previous seasons, the countries of South and North America were the major exporters of soybeans to Russia (generally 90% of the exports). However, the EU-27 and CIS countries also make its small contribution to the delivery of soybeans to the territory of the Russian Federation.

According to the customs statistics, during several recent seasons Paraguay is the major supplier of soybeans to Russia.

 

Import of soybeans to Russia by countries

 

2012/13 MY

2013/14 MY (September-May)

Countries

Volumes, tonnes

Countries

Volumes, tonnes

1

Paraguay

474 013

Paraguay

481 321

2

USA

81 844

USA

390 158

3

Brazil

64 376

Brazil

173 721

4

Ukraine

41 436

Ukraine

125 624

5

Uruguay

27 859

Uruguay

92 146

6

Lithuania

26 250

Lithuania

36 726

7

China

239

Latvia

3 790

8

Austria

234

Denmark

2 416

9

Canada

191

Canada

2 329

10

France

65

Austria

550

11

Serbia

25

Serbia

280

12

Belgium

20

China

245

13

Italy

13

France

119

 

Others

17

Others

170

 

TOTAL

716 582

TOTAL

1 309 595

Source: customs statistics of the Russian Federation

   

 

We should note that Russia has the considerable potential in soybean production in terms of the yield growth, and in the nearest future the country is expected to increase the volume of the oilseed production, processing and exports.

 

ElenaKarasik,

oilseed market analyst of APK-Inform Agency

 

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