Russian oilseed production expected to be up 9 percent in 2008 

 

 

Russian production of the main oilseed crops (sunflowers, soy, and rapeseed) in 2008 is forecast to increase more than 9 percent over 2007 levels to 7.5 million tonnes, according to a USDA GAIN report dated May 22,2008. 

 

The "Russian Federation Oilseeds and Products Oilseeds Annual Report 2008", prepared by the USDA Foreign Agricultural Service, forecast production of sunflowerseeds, soy, and rapeseeds to increase 9 percent, 12 percent, and 3 percent, respectively.

 

Oilseed crushing is expected to grow 8 percent to 7.3 million tonnes, boosting oilseeds meal production to 3.4 million tonnes

 

Despite the increase, imports of oilseeds will grow to 460,000 tonnes primarily due to greater soy imports. Imports of oilseeds meal will also increase to 970,000 tonnes.

 

End of year stocks of oilseeds and meal are forecast to slightly decrease from relatively low levels of MY 2007, but primarily due to better marketing management of oilcrushing companies.

 

Despite the increased forecast for oilseed for 2008, the figure is still 500,000 tonnes lower than in 2006.

 

Area planted is forecast to increase by 380,000 hectares to 7.1 million hectares, an area also smaller than in 2006. Areas have shrunk due to increased competition from other crops.

 

Sunflower seeds
 

Area sown to sunflowerseeds is forecast at 5.65 million hectares, up 350,000 hectares from 2007. However, most of this increase is in regions with low sunflower yields.

 

In the Southern Federal District, competition with wheat and concerns about crop rotation will keep area sown to sunflowerseeds at the last year's level.

 

A slightly higher yield forecast is based primarily on improved seed quality and on increased agronomic technology.

 

Soy
 

Area sown to soy will be the same as in 2007. Given normal weather, harvested area is expected to increase, and production will increase by 95,000 tonnes to 695,000 tonnes.

 

These increases are expected in the Russian Far East, which suffered from bad weather in 2007, while soy production in European Russia will remain at the same level as in 2007.

 

''Russian Soya'', a federal program, aims to increase soy protein production for the feed industry, and is providing assistance to the construction of three soybean crushing plants with a declared total capacity of 1.5-2.0 million tonnes per year. However, domestic production of soy will not be able to meet growing demand in the near future.

 

Rapeseeds sown area is forecast at 690,000 hectares, up 30,000 hectares from 2007. Production is expected to be up 3 percent from 2007.

 

In 2007, Russia's Ministry of Agriculture announced a plan to increase rapeseed area by 7-8 million hectares and boost production to 20-21 million tonnes in the next 5-10 years.

 

However, the programme is largely unfinanced and there are no high-yielding rapeseed varieties in Russia. Furthermore, winterkill of rapeseed in Russia is high and there is a lack of rapeseed extraction plants in Russia.

 

As rapeseed production in Russia varies significantly from year to year, rapeseed meal users such as dairy farms face problems procuring the feed.

Oilseed production 
 

Prices for oilseeds and oilseeds products are very attractive for farmers, as domestic demand for both feeds and vegetable oil remain very strong.

 

However, with the increase in grain prcies, farmers will prefer to grow crops that require “saved” seeds, fewer chemicals and more simple technologies than oilseeds.

Oilseed trade 
 

Russia's soy imports grew strongly in 2007.

 

Soy imports jumped ten-fold in 2007 to 365,000 tonnes, accounting for an eight-fold jump in overall oilseed imports.

 

Total protein meal imports are forecast to increase from 955,000 tonnes in MY 2007 to 970,000 tonnes  in MY 2008. Soymeal will account for 93 percent of all protein meal imports and are forecast to increase by 10,000 tonnes to 900,000 tonnes in MY 2008.

 

Meanwhile, exports of oilseeds decreased from 257,000 tonnes in MY 2006 to an estimated 145,000 tonnes in MY 2007, reflecting strong demand in the country. 

 

Lower domestic production and higher world market prices for oilseeds tripled sunflowerseed prices in European Russia from 6,000 Rubles (US$227) per tonne in the end of January 2007 to 17,000 Rubles (US$700) per tonne in the end of January 2008.

 

Crushing

 

Oilseeds crush will reach 7.3 million tonnes, including 5.64 million tonnes of sunflowerseeds, 1.09 million tonnes of soy and 588,000 tonnes of rapeseeds.

 

Although crushing of oilseeds fell by 4.5 percent in 2007, Russia's crushing facilities are improving, and production of oilseeds meal is expected to remain at 3.1 million tonnes.

 

Big oilseed crushing plants, which account for two-thirds of Russian oilseed crushing, dominate the Russian oilseeds market. Among these companies are ''Jug Rusi'', ''Solnechnye Producty'', ''Efko'', ''Aston'', ''NMZhK'', ''WJ'', ''Russkiye Masla''. These holdings purchase two-thirds of marketed oilseeds,

 

Consumption

 

Russia's oilseed consumption will increase by 8 percent in MY 2008 to 7.82 million tonnes.

 

Domestic consumption of protein feed will continue to increase, and will reach 3.6 million tonnes, up 215,000 tonnes  from MY 2007 thanks to strong demand from the meat industries.

 

Consumption of soy meal is growing and will reach 48.4 percent of the total protein meal consumption while  rapeseed meal and sunflower seed meal will reach 8 percent and 40 percent of the total protein meal consumption respectively.

 

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