May 16, 2012

Russia lowers soy export tax to 5%

The government of Russia has recently reduced the export customs levy on soy from 20% to 5%.

Experts believe the move could lead to a sharp increase in soy exports, which will in turn create a deficit in the domestic market, thus increasing the price of compound feed.

As and from May 2012 the rate of export duty on soy is 5% but not less than EUR8.50 (US$10.9) per tonne. Previously, it was 20% with a minimum limit of EUR35 (US$44.9) per tonne.

Such a serious decline in rates can be explained by the fact that last year, Russia had a record soy harvest - 1.7 million tonnes. In 2010 it was less - only about 883,000 tonnes. Currently, Russia is carrying out a large-scale project to create a corn-soy belt in Siberia, which will allow the next two years to further increase soy production by 50%.

According to the President of the Russian Soy Union, Anatoly Ustyuzhanina Russian soy has an important competitive advantage over foreign products, and therefore its supply to the world market in the next few years will be very attractive to local manufacturers.

"Our soybeans are different from foreign soybeans because it grows without any the use of genetically modified organisms (GMO). In foreign soy GMO's are found, although not in large volumes. Nevertheless, the Russian Soy Union now poses the question that the domestic soybean should only go to food production, while the imported soy - to feed production. However, animal feed at the same time should not be hazardous to their health and, therefore, to human health. ".

However, according to some experts the increase in soy exports over the next two years could lead to a rise in the price of compound feed by 15-20%.