Report Highlights:

FAS/Moscow forecasts Russia's 2016 production of three major crops (sunflowerseed, soybeans, and rapeseed) at 13.25 million metric tons (MMT), a 4 percent increase from last year. Sunflowerseed is forecast to increase 1.2 percent to 9.2 MMT and soybeans are forecast to increase 6 percent to 2.8 MMT respectively. The increase in sunflower and soybean production is primarily due to a slight increase in planted area. Production of rapeseed is forecast to increase 26 percent to 1.25 MMT, due to an increased share of high yielding winter rapeseed in the total rapeseed crop. Area sown to these three major crops is forecast to increase 3.6 percent to 10.4 million hectares mostly due to an increase in sunflowerseed area by almost 0.2 million hectares to 7.1 million hectares. FAS/Moscow forecasts Russia's imports of these three crops at approximately 2.2 MMT, including 2.1 MMT of soybeans. Exports are forecast at 0.55 MMT, including 0.4 MMT of soybeans. Russia's total crush for the three major oilseed crops is forecast to increase from estimated 13.3 MMT in MY 2015/16 to 13.85 MMT, including 8.7 MMT of sunflowerseed and 4.0 MMT of soybeans. Production of oilseed meal is forecast to increase from estimated 7.17 MMT in MY 2015/16 to 7.48 MMT in MY 2016/17. Production of vegetable oil is forecast to increase from 4.64 MMT in MY 2015/16 to 4.82 MMT in MY 2016/17.

General Information

NOTE: USDA unofficial data excludes Crimean production and exports. However, as of June 2014, Russian official statistics (ROSSTAT) began incorporating Crimean production and trade data into their official estimates. Where possible, data reported by FAS Moscow is exclusive of information attributable to Crimea.

Executive Summary:

Oilseeds

NOTE: In the beginning of 2016, the Russian State Statistical Service (Rosstat) published data on sunflowerseed, soybean and rapeseed crops in 2015 both in bunker and clean weight, and indicated that future data will be reported in clean weight. Before 2015 Rosstat did not calculate clean weight for oilseeds. For reference, Rosstat provided data on the three oilseed crops both in bunker weight and in clean weight back to 2010. Clean weight is approximately 0.7 – 0.8 percent lower than bunker weight. FAS/Moscow will forecast production of the three crops in clean weight, and will use clean weight data in the PSD tables.

FAS/Moscow forecasts Russia's 2016 production for three major crops (sunflowerseed, soybeans, and rapeseed) at 13.25 million metric tons (MMT), a 4 percent increase from the crop last year. The sunflowerseed crop, which comprises up to 70 percent of Russia's oilseeds crop, is forecast to increase 1.2 percent to 9.2 MMT due to an increase in planted area from 6.92 million hectares in 2015 to 7.1 million hectares in 2016. While yields in 2016 are likely to remain approximately the same as in 2015 (1.4 MT/HA), farmers have the following incentives to increase area:

  • Russia's capacity to crush oilseeds exceeds oilseed production by 5-6 MMT. Thus, in 2015 the total crushing capacity in Russia was estimated at 20-21 MMT, while the total oilseeds production was only 14.5 MMT. Therefore, demand for oilseeds, including sunflowerseed for crushing, is very high;
  • In accordance with WTO commitments, in 2015 Russia decreased export duties on sunflowerseed, and will further decrease export duties in September 2016. Thus, traders' demand for sunflowerseed is likely to increase.

However, expansion of area sown to sunflowerseed is likely to be limited due to competition with grains for fertile soil in the crop producing areas of the Russian Federation. Requirements for crop rotation imposed by some provincial authorities further reduce available productive area. Additionally, farmers' financial constraints, low government support of oilseed producers, and increased cost of all major inputs, including imported planting seeds and chemicals, limits farmers ability to increase yields and decrease dependency on the weather.

FAS/Moscow forecasts a 6 percent increase in the 2016 soybean crop to 2.8 MMT, due to increased planted area from 2.1 million hectares in 2015, to 2.2 million hectares in 2016. The Russian Far East is the major producer of soybeans in Russia, and account for over 50 percent of Russia's soybean crop. In accordance with their WTO commitments, Russia lifted the export duty on soybeans in September 2015, and the Chinese demand for soybeans from the Russian Far East increased sharply. In 2016, new crushing capacity is expected in the Far East, including capacity for production of highly processed soybean products, such as isolates. Thus, incentive to increase soybean production in the Far East is high, although weather and relatively low yields remain limiting factors.

The remaining portion of Russia's soybean production is centered in European Russia. Demand for soybean meal from Russian poultry and livestock producers is increasing, which should stimulate soybean production in European Russia. However, competition for fertile soil in European Russia is high and soybeans are not a priority for farmers in this region. Analysts report that soybeans grown in European Russia cannot compete in price or quality with imported soybeans despite the devalued ruble.

Rapeseed production is forecast to increase 26 percent, to 1.25 MMT, primarily due to increased share of high yielding winter rapeseed in the total rapeseed crop. Production of rapeseed in 2015 was down due to significant winter kill. Area sown to rapeseed is forecast to increase 8 percent in 2016.

Forecasts of oilseed yields in Russia are very preliminary. Most Russian oilseed crops are planted in May, and therefore 2016 yield forecasts are based largely on multi-year trends. Weather remains a major determining factor for Russian oilseeds yields, and a primary reason that average yields are low.

Industry analysts forecast a further increase in production of oilseed crops, such as linseed crops for oil (Crown flax and Camelina) and Safflower, due to foreign demand for these niche crops, an absence of export duties, and cold resistance of these crops. Area planted to these crops may expand further in the northern and eastern Russian provinces. However, the total production of these crops is still less than 1 MMT, and yields are less than 1 MT per hectare.

In 2015, in accordance with their WTO commitments, Russia again decreased the following export duties:

  • export duties on sunflowerseed decreased from 13.24 percent of customs value, but not less than 19.88 Euro per 1 MT to 9.88 percent, but not less than 14.81 Euro per 1 MT; and
  • rapeseed export duties decreased from 11 percent, but not less than 19.26 Euro per 1 MT to 6.5 percent, but not less than 11.4 Euro per 1 MT.

In September 2016, Russia is scheduled to further decrease export duties on sunflowerseed and rapeseed. Export duties on soybeans were fully lifted as of September 2015. The decrease in export duties on sunflowerseeds and rapeseed and the complete elimination of export duties on soybeans, coupled with the devaluation of the ruble, would generally stimulate exports of oilseeds. However, in MY 2015/16, high domestic crusher demand for oilseeds overwhelmed these incentives to export. Moreover in MY 2016/17, oilseed exports are not forecast to increase significantly.

FAS/Moscow estimates soybean MY 2015/16 exports from the Russian Far East at 380,000 MT and forecast an increase in exports in MY 2016/17 to 0.4 MMT. There are almost no soybean exports from European Russia. Imports of soybeans are forecast at 2.1 MMT, 0.1 MMT higher than in MY 2015/16. Exports of sunflowerseed are forecast at 60,000 MT, and imports are forecast at 50,000 MT. Sunflowerseed trade will be limited to trade in planting seeds and some border trade. Rapeseed exports are forecast at 90,000 MT.

Russia: Consolidated PSD for Major Oilseeds for MY 2016/17, 1,000 MT, 1,000 HA

MY 2016/17

Sunflowerseed

Soybeans

Rapeseed

Peanuts

TOTAL

Area Planted

7,100

2,200

1,100

0

10,400

Area Harvested

6,600

2,150

1,000

0

9,750

Beginning Stocks

190

119

32

4

341

Production

9,200

2,800

1,250

0

13,250

MY Imports

50

2,100

5

145

2,155

MY Imp. from U.S.

0

300

0

0

300

MY Imp. from EU

0

0

0

0

0

Total Supply

9,440

5,019

1,287

149

15,746

MY Exports

60

400

90

0

550

MY Exp. to EU

5

10

50

0

65

Crush

8,700

4,000

1,150

0

13,850

Food Use Dom. Cons.

220

0

0

145

220

Feed Waste Dom. Cons.

300

500

20

0

820

Total Dom. Cons.

9,220

4,500

1,170

145

14,890

Ending Stocks

160

119

27

4

306

Total Distribution

9,440

5,019

1,287

149

15,746

Note: The above table is composed of PSD forecast for each crop, despite differing marketing years. The marketing year for sunflowerseed and soybeans is September – August. The marketing year for rapeseed is July – June.

Meal

NOTE: FAS/Moscow increased the crushing rate for sunflowerseed meal and for sunflowerseed oil for MY 2015/16 and MY 2016/17 in the PSDs to 0.419 both for meal and for oil. Over the last decade, Russian sunflowerseed crushing facilities have improved and new plants were constructed, increasing the crushing rate. Thus, FAS/Moscow estimated production of sunflowerseed meal in MY 2015/16 at 3.58 MMT, 2 percent higher than USDA's estimated production of sunflowerseed meal.

FAS/Moscow forecasts total crush of the three major oilseed crops at 13.85 MMT in MY 2016/17, which is 4.1 percent increase from the estimated 13.31 MMT in MY 2015/16. This includes crush of 8.7 MMT of sunflowerseed (8.6 MMT in MY 2015/16), 4.0 MMT of soybeans (3.8 MMT in MY 2015/16), and 1.15 MMT of rapeseeds (0.96 MMT in MY 2015/16). Russia's total domestic production of the three major oilseed meals will increase to 7.48 MMT in MY 2016/17 (estimate for MY 2015/16 is 7.17 MMT), including 3.65 MMT of sunflowerseed meal (3.58 MMT in MY 2015/16), 3.15 MMT of soybean meal (3.02 MMT in MY 2015/16), and 0.68 MMT of rapeseed meal (0.57 MMT in MY 2015/16).

FAS/Moscow forecasts imports of oilseed meal in MY 2016/17 at 0.55 MMT, the same as in MY 2015/16. In MY 2016/17 all imported meal, as forecast, will be soybean meal. Imports of soybean meal in MY 2016/17 will be the same as in MY 2015/16. Despite high demand in soybean meal, and removal of import duties in 2012 as a result of WTO accession, soymeal imports will be limited because of the weak ruble. FAS/Moscow estimates MY 2015/16 soybean meal imports at 20,000 MT higher than USDA's official estimate. However, FAS/Moscow estimates MY 2015/16 Russian soybean imports at 0.25 MMT lower than the official USDA's estimate. Post lowered the estimate of soybean imports and increased the estimate of meal imports based on the following assumptions:

  • the temporary ban on U.S. soybean imports; and
  • potential problems with South American soybean imports due to registration issues with GE stacked traits.

Because of these potential issues, Russian traders may increase imports of meal instead of imports of soybeans.

FAS/Moscow forecasts MY 2016/17 Russian exports of oilseed meals at 2.2 MMT, including 1.5 MMT of sunflowerseed meal, 0.4 MMT of soybean meal, and 0.3 MMT of rapeseed meal. These exports will be 30,000 MT, 50,000 MT, and 50,000 MT, respectively, higher than the estimated exports of sunflowerseed, soybean and rapeseed meals in MY 2015/16. Oilseed meal exports were stimulated by the devaluation in the ruble in MY 2015/16. The MY 2016/17 forecast reflects a slight increase based on the assumption that the ruble will continue to be weak.

FAS/Moscow forecasts Feed Waste Domestic Consumption of oilseed meals at 5.88 MMT in MY 2016/17, compared to the FAS/Moscow estimate of 5.72 MMT in MY 2015/16, and USDA's estimate of oilseed meal consumption in MY 2015/16 at 5.66 MMT. The difference between the Post estimate and the USDA estimate is due to the adjustment to the crush ratio for sunflowerseed meal.

Russia produces and trades fish meal as well, although Russia's production of fish meal is small. FAS/Moscow estimates domestic production of fish meal in MY 2015/16 at 145,000 MT, imports at 25,000 MT, and exports at 60,000 MT. These estimates are the same as USDA's estimates. FAS/Moscow forecasts a slight increase in production of fish meal in MY 2016/17 to 160,000 MT. This projected increase in production is largely attributable to a higher fish catch. Imports are forecast to increase from 25,000 MT to 30,000 MT, while exports are forecast to decrease from 60,000 MT to 50,000 MT. The change in the trade forecast is due to an expected increase in the domestic demand for fishmeal in MY 2016/17 because of Russia's efforts to further develop its domestic aquaculture.

Russia: Consolidated PSD for Major Meals for MY 2016/17, 1,000 MT

POST MY 2016/17

Sunflowerseed

Soybean

Rapeseed

Fish Meal

TOTAL

Crush

8,700

4,000

1,150

600

14,450

Extr. Rate, 999.9999

0.420

0.788

0.591

0.267

Beginning Stocks

159

91

0

2

252

Production

3,650

3,150

680

160

7,640

MY Imports

0

550

0

30

580

MY Imp. from U.S.

0

30

0

0

30

MY Imp. from EU

0

100

0

0

100

Total Supply

3,809

3,791

680

192

8,472

MY Exports

1,500

400

300

50

2,250

MY Exp. to EU

1,000

40

200

0

1,240

Industrial Dom. Cons.

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

Feed Waste Dom. Cons.

2,200

3,300

380

140

6,020

Total Dom. Cons.

2,200

3,300

380

140

6,020

Ending Stocks

109

91

0

2

202

Total Distribution

3,809

3,791

680

192

8,472

Note: The above table is composed of PSD forecast for each meal despite differing marketing years.

Oil

Sunflowerseed remains the primary oilseed crop in Russia, and the main product for crushers is still vegetable oil, while meal remains a secondary product. Sunflowerseed oil dominates domestic human consumption of vegetable oils. FAS/Moscow forecasts Russia's total vegetable oil production in MY 2016/17 at 4.82 MMT, 0.18 MMT more than in MY 2015/16. The increase is due to an expected increase in crush of sunflowerseed and rapeseed in MY 2016/17 compared with MY 2015/16. Vegetable oil production in MY 2016/17 will include 3.65 MMT of sunflowerseed oil (3.58 MMT in MY 2015/16), 0.72 MMT of soybean oil (0.68 MMT in MY 2015/16), and 0.45 MMT of rapeseed oil (0.38 MMT in MY 2015/16).

Russia will increase exports of vegetable oil from an estimated 2.16 MMT in MY 2015/16 to almost 2.35 MMT in MY 2016/17. These exports will include 1.6 MMT of sunflowerseed oil (1.5 MMT in MY 2015/16), 0.45 MMT of soybean oil (0.42 MMT in MY 2015/16), and 0.3 MMT of rapeseed oil (0.24 MMT in MY 2015/16).

Russia is a significant importer of palm oil. FAS/Moscow estimates Russia's palm oil imports in MY 2015/16 at 0.77 MMT, but forecast a decrease in imports of palm oil in MY 2016/17 to 0.7 MMT. FAS/Moscow estimates of palm oil imports in MY 2015/16 will be lower than USDA's official estimate. Both the lower estimate and the forecasted decrease in palm oil imports are based on Post's assumption that an anti-palm oil campaign launched in Russian media will negatively impact demand for palm oil. Additionally, the Ministry of Agriculture proposed special labelling requirements for products that contain palm oil. This special palm oil mark on food labels may also slightly decrease use and imports of palm oil to Russia in MY 2015/16 and in MY 2016/17.

Russia: Consolidated PSD for Major Vegetable Oils for MY 2015/16, 1,000 MT

POST MY 2016/17

Sunflowerseed

Soybean

Rapeseed

Palm

TOTAL

Crush

8,700

4,000

1,150

13,850

Extr. Rate, 999.9999

0.420

0.1793

0.391

Beginning Stocks

146

17

16

69

248

Production

3,650

717

450

0

4,817

MY Imports

10

1

0

700

711

MY Imp. from U.S.

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

Total Supply

3,806

735

466

769

5,776

MY Exports

1,600

445

300

0

2,345

MY Exp. to EU

100

160

150

0

410

Industrial Dom. Cons.

400

31

20

150

601

Food Use Dom. Cons.

1,650

230

130

550

2,560

Feed Waste Dom. Cons.

30

0

0

0

30

Total Dom. Cons.

2,080

261

150

700

3,191

Ending Stocks

126

29

16

69

240

Total Distribution

3,806

735

466

769

5,776

Note: The above table is composed of PSD forecast for each oil despite differing marketing years.

OILSEEDS

Production:

FAS/Moscow forecasts production of the three major oilseeds (sunflowerseed, soybeans and rapeseed) at 13.25 MMT, a 0.51 MMT increase from last year, due to increased area sown to these three crops. FAS/Moscow forecasts that in MY 2016/17, area sown to Russia's three major oilseeds crops (sunflowerseed, soybeans, and rapeseed) will increase from the previous year by almost 0.4 million hectares to 10.4 million hectares. Demand for oilseeds remains high, prices were high in the 2015/16 season. Sunflowerseed area is projected to increase by almost 3 percent to 7.1 million hectares. The area sown to soybeans will increase by almost 5 percent to 2.2 million hectares. Area sown to rapeseed will increase by 8 percent to 1.1 million hectares.

Area sown to all oilseeds (three major crops and other crops, such as Oil flax, Camelina and Sufflower) in Russia has grown steadily since 2000 from 5.5 million hectares in 2000 to 11.4 million hectares in 2015. This includes the area sown to sunflowerseed that increased from 4.6 million hectares in 2000 to 6.9 million hectares in 2015. However, the share of area sown with sunflowerseed, as a percentage of total area sown to oilseeds decreased, while the share of soybeans, rapeseed and other oilseed crops increased. Nevertheless, sunflowerseed still dominates total oilseed production. However, because sunflowerseed yields are heavily dependent on weather, production fluctuations are significant.

Results of 2015 crop

In 2015, Rosstat changed its reporting of oilseeds production from bunker weight to clean weight. It recalculated Russia's total production of sunflowerseed, soybeans and rapeseed back to 2010, both in bunker and in clean weight.

2010

2011

2012

2013

2014

2015

Sunflowerseed

- clean weight

4,979

9,062

7,495

9,842

8,475

9,202

- bunker weight

5,345

9,697

7,993

10,554

9,034

9,762

Soybeans

- clean weight

1,133

1,641

1,683

1,517

2,364

2,641

- bunker weight

1,222

1,756

1,806

1,636

2,597

2,845

Rapeseed

- clean weight

659

945

1,259

1,338

1,012

- bunker weight

670

65059

1,035

1,393

1,464

1,125

Source: Rosstat. Rosstat data for 2015 includes Crimea. In 2015 Crimea produced 118.9 Th.MT of oilseeds in clean weight, including 107.3 ThMT of sunflowerseed, 0.7 ThMT of soybeans, and 10.9 ThMT of rapeseed.

Oilseeds remain among the most profitable crops in Russia. Thus, in the South of European Russia in 2015/16 returns (output minus cost of production) per hectare of planted area for sunflowerseed were approximately 47,000 rubles ($723) per hectare, and were second only to returns from planting rice (61,000 rubles or $938 per hectare). Returns from planting soybeans were the fourth highest (31,000 rubles or $477 per hectare) after rice, sunflowerseed, and sugar beets. Ruble returns in 2015 for sunflowerseed and soybeans were the highest in the last 6 years. In Central European Russia, returns from sunflowerseed (46,000 rubles or $707 per hectare) and soybeans (34,000 rubles or $523 per hectare) were the highest among other crops, and also the highest in the last 6 years.

Starting in 2015, Rosstat will report production for sunflowerseed, soybeans and rapeseed only in clean weight.

Planting seeds

Russian oilseeds producers depend on imported planting seeds. Thus, in 2015, according to the Russian Ministry of Agriculture, the share of foreign varieties in sunflowerseed was almost 49 percent, in spring rapeseed 28 percent, in winter rapeseed 55 percent, and in soybeans almost 19 percent.

Given ruble devaluation, the current financial situation for farmers, and the high dependency on imported planting seeds, Russian farmers will either see an increase in cost of production of oilseeds and a decrease in farmers' returns in 2016, or farmers will limit imports of good quality seeds and likely see a decrease in yields.

Sunflowerseed

FAS/Moscow forecasts Russia's sunflowerseed production in 2016 at 9.2 MMT, a 1.2 percent increase from 2015. This increase in production will be stimulated by high demand for sunflowerseed from crushers. Crushing capacity has already exceeded supply of oilseeds, prices for oilseeds in 2015/16 grew, and industry analysts forecast high prices in MY 2016/17. An increase in sunflowerseed production is forecast based on an increase in planted area. However, sunflowerseed will compete with other oilseeds, and especially grains, for productive area. FAS/Moscow forecasts that area sown to sunflowerseed will increase only 2.6 percent.

Weather still remains the main factor determining sunflowerseed yields. Given average weather, yields (per harvested area) in 2016 are expected to be at the same level, or slightly higher than, yields in 2015, or 1.4 MT/HA calculated in clean weight, or 1.5 MT/HA calculated in bunker weight. In 2015, Rosstat switched from reporting sunflowerseed crop in bunker weight to reporting in clean weight, changing yield data. Sunflowerseed remains a profitable crop for farmers, but increasing costs for imported planting seeds and chemicals (which are vital for effective production of sunflowerseed) that followed the depreciation of the ruble in 2015/16 will impact yields because farmers will likely limit use of the more expensive inputs. There are some enterprises that still can afford investments in imported hybrids, modern technologies and agrochemicals, but the overwhelming majority of Russian sunflowerseed producers will not be able to increase imported inputs, and yields will remain low.

In 2015, production of sunflowerseed increased in all federal districts except the North Caucasus. The increase in production was primarily due to favorable weather and slightly improved yields. The range of Russia's major sunflowerseed producing provinces largely did not change from those in 2014. Saratov Oblast and Krasnodar Kray changed places at the top of the list. Tambov and Volgograd also changed places, and Altay Kray moved forward in the list from the 14th place in 2014 to 10th place in 2015.

Highest Sunflowerseed Production by Provinces (2015)

1. Saratov Oblast – 11.0%

2. Krasnodar Kray – 10.9%

3. Voronezh Oblast - 10.8%

4. Rostov Oblast - 8.9%

5. Tambov Oblast – 8.2%

6. Volgograd Oblast – 8.0%

7. Samara Oblast – 5.8%

8. Orenburg Oblast – 5.7%

9. Stavropol Kray – 4.2%

10. Altay Kray – 4.0%

11. Lipetsk Oblast – 3.9%

12. Belgorod Oblast – 3.5%

13. Kursk Oblast - 2.9%

14. Penza Oblast - 2.9%

15. Bashkortostan Republic - 2.7%

Soybeans

FAS/Moscow forecasts that area planted to soybeans will increase by 4.7 percent or 100,000 hectares to 2.2 million hectares, and production will increase by 6 percent to 2.8 MMT (clean weight). In 2014 Russia's soybean crop was 2.64 MMT in clean weight or 2.84 MMT in bunker weight. Both were historic records for Russia. Between 2011 and 2015, production has been growing primarily due to increased harvested area. While yields have remained relatively stable, they are relatively low compared with average yields in other soybean producing countries.

Highest Soybean Production by Province (2014)

1. Amur Oblast – 36.7%

2. Belgorod Oblast – 12.3%

3. Krasnodar Kray – 9.5%

4. Primorsky Kray – 9.0%

5. Kursk Oblast – 6.5%

6. Jewish A.O. – 4.5%

7. Voronezh Oblast – 3.6%

8. Tambov Oblast – 2.9

9. Orel Oblast – 2.8%

Media in the Russian Far East reported that demand for soybeans in both the domestic and Asian markets far exceeds demand for other crops grown in the Russian Far East. Despite the annual growth of cultivation area and increased productivity, which grew by more than 10 percent in Primorye last year, Russia continues to experience a shortage of this product. This year, soybean prices increased significantly in Primorye. In the fall, when the harvest was just collected, processors paid between 14,000 rubles ($215) to 16,000 rubles ($246) per 1 MT. By February 2016, the price reached 27,000 rubles ($415), and is changing nearly every week. Some managers of large farms in Primorye expect the price to increase to 30,000 rubles ($461) per 1 MT, and expect March soybean prices will be 33,000 rubles ($508) per 1 MT. The main factor affecting the price, according to market participants, was the devaluation of the ruble. Under these circumstances, soy became a profitable investment. Sellers, including Chinese, buy soybeans for resale in China. The Russian government has implemented no measures to restrain these exports. While export duties on wheat were introduced by the Government of the Russian Federation on February 1, 2015, no similar resolution was implemented for soy. Local farmers consider the current price for soybeans as fair since their products are competitive in the world market and the price in the domestic market is underestimated.

The 2015 the Russian soybean crop reached an historic high of 2.8 MMT, of which 53 percent was grown in the Far East. Export duties on soybeans were lifted on September 1, 2015. According to industry analysts, the volume of soybean production in the Russian Far Eastern distinguishes it from the Russian European market. Given the location, soybeans produced in the Far East are either exported to China or sold to crushers located in the Far East or Siberia. High soybean prices in the Far East and the high cost of transporting soybeans from the Far East to Central European Russia make soybeans from the Far East more expensive for processors than either soybeans from European Russia or even imported soybeans. Soybean exports to China have increased, and soybean production in the Far East remains profitable.

According to industry analysts, soybeans produced in European Russia in MY 2015/16 were less profitable than the previous year. Thus, as of mid-December, consumers in Belgorod were ready to pay 25,500 rubles per 1 MT for soybeans with protein content at 32-33 percent (delivery to the plant). However, for soybeans with protein less than 3 percent, consumers would pay no more than 24,000 rubles per 1 MT EXW elevator. This price was 2,000 rubles per 1 MT less than the price for rapeseed and 1,000 rubles less than the prices for sunflowerseed.

Analysts forecast that, unlike sunflowerseeed and rapeseed prices, soybean prices will be affected by decreasing trend for world soybean and soybean meal prices. Additionally, Argentina has decreased export duties. Despite the devalued ruble, imported soybeans for crushing and soybean meal may be attractive for Russian livestock and poultry producers. While some contend that the higher fat content of Russian beans is better for feeding dairy cattle and some poultry, most industry experts maintain that the higher protein content of the imported soybeans is better for feed. Therefore, even though the Government develops the state program aimed at growing domestic production of soybeans, in 2016 farmers in European Russia may decrease area sown to soybeans in favor of sunflowerseed and rapeseed.

Rapeseed

The 2015 rapeseed crop decreased primarily because of winter kill. Even though the rapeseed export duty decreased to 6.5 percent, but not less than 11.4 Euro per 1 MT, exports of rapeseed are expected to be lower than last year. Exports of rapeseed oil and meal are also expected to decrease. Industry analysts estimate exports of rapeseed in MY 2015/16 at 50,000 MT, and exports of rapeseed oil are estimated at 250,000 MT (340,000 MT last year), and exports of rapeseed meal are estimated at 160,000 MT, compared with 290,000 MT last year.

Linseed crops (Crown flax and Camelina) and Safflower for oil

Production of linseed crops (Crown flax and Camelina) and safflower for oil increased in the last 3 years, driven by high foreign market demand and the absence of export duties. Although some varieties of these crops can be sown further north than sunflowerseed and soybeans, the bulk of production of these crops is found in the Southern and North Caucasus federal districts (FD), the major export-oriented districts of European Russia. However, despite strong export demand, demand of domestic crushers for linseed oil crops was also very strong, and FAS/Moscow assumes that the share of exports in domestic production in 2014/15 will be slightly over 60 percent, compared to the 75-80 percent experienced during the period MY 2008/09 through 2012/13.

In 2015, Russia harvested a record crop of flax for oil - 554,000 MT, a 175,000 MT or 47 percent increase from last year. On the other hand, production of the second important niche oilseeds crop, Camelina, decreased from 156,000 MT in 2014 to 103,000 MT in 2015 due to winter kill primarily in the Volga Valley FD. Data is not available on production of another niche oilseed crop - Safflower. In 2014, Safflower production was 87,000 MT, and it is reported to increase in 2015. This niche crop is grown in the dry regions of the Southern and Volga Valley federal districts, mostly for exports. In CY 2014, Russia exported 56,600 MT of safflower, including 47,800 MT to Turkey, 2,200 MT to Iran and 2,200 MT to Belgium.

In 2015/16, due to a very high domestic demand for oilseeds, exports of linseed and safflower decreased despite growth of production of these crops. The share of exports to production is estimated to decrease from 54 percent in MY 2014/15, to 40 percent in MY 2015/16. FAS/Moscow estimates exports based on the official customs data for July through December 2015 compared with July through December 2014 (marketing year for these crops is assumed July through June, as with rapeseed). Thus for the period July through December 2014, Russia exported 245,776 MT of linseed (HS code 1204), while during the period July through December 2015, Russia exported only 233,440 MT. FAS/Moscow estimates MY 2015/16 exports at 320,000 MT.

Consumption:

Since the early 2000's, Russia's oilseeds consumption has steadily increased due to growing demand for protein feeds, such as meal, cake and, in the last 2-3 years, whole-fat feeds (semi-processed soybeans). Although, vegetable oil still remains a major product of the Russian oilseeds industry.

FAS/Moscow forecasts that Russia's domestic consumption of the three major oilseeds in MY 2016/17 will reach 14.75 MMT, a 3 percent increase compared with MY 2015/16 domestic consumption of 14.31 MMT. The domestic consumption total includes 9.22 MMT of sunflowerseed (1.7 percent increase from last year), all due to increased crush from 8.55 MMT that FAS/Moscow estimated for MY 2015/16 to 8.7 MMT. Food use domestic consumption and feed use will remain at the same level as last year: 0.22 MMT and 0.3 MMT, respectively. Consumption of soybeans will increase from 4.25 MMT in MY 2015/16 to 4.5 MMT in MY 2016/17, and this will include crush of 4.0 MMT and direct feeds use of 0.5 MMT of beans (whole and semi-crushed beans). Soybean crush is forecast to increase by 0.2 MMT from last year, and direct use of beans is forecast to increase 50,000 MT. Domestic consumption of rapeseed is forecast to increase from less than 1 MMT in MY 2015/16 to almost 1.2 MMT in MY 2016/17, and crush of rapeseed will comprise over 98 percent of consumption.

Oilseeds crushing capacity in Russia has been rapidly increasing in the last 14 years. According to industry analysts, in MY 2015/16 oilseeds potential crushing capacity has reached 20.6 MMT, which is 4.7 times more than in 2002. At the same time production of oilseeds has tripled to 14.56 MMT. Industry analysts consider that in the season 2015/16 if capacity of processors is used at 100 percent, they would be able to crush 20.2 MMT of oilseeds, or 2.2 MMT more than in the season 2014/15. However, other analysts consider that due to technological necessity to keep some facilities not activated, Russia's actual capacity to crush oilseeds is 18 MMT. This still exceeds oilseeds domestic production by at least 3.0 MMT. The sunflowerseed crop, Russia's main oilseeds crop, is still heavily dependent on weather and area of production. In all sunflowerseed producing regions production was lagging behind fast growing crushing capacity. Thus, in MY 2015/16 in the Southern and North Caucasus federal districts crushing capacity exceeded production by 55 percent (in MY 2014/15 – by 50 percent), in the Central FD crushing capacity exceeded production by 44 percent (in MY 2014/15 – by 47 percent), and in the Volga Valley FD – by 21 percent (in MY 2014/15 crush capacity was lower than production by 10 percent).

There is no information on the specification of oilseed crushing capacity. Most crushers work with sunflowerseed, but many of the modern plants built in the last 5 years in European Russia can switch between crushing sunflowerseed and rapeseed, and some have the ability to crush soybeans. In MY 2014/15 the capacity of crushing facilities for sunflowerseed was 12.9 MMT, including 3.3 MMT in Central European Russia, 5.6 MMT in the South of European Russia, 2.8 MMT in the Volga Valley, 0.6 MMT in Ural, and 0.6 MMT in Siberia. Since then sunflowerseed crushing capacity increased by at least 1 MMT due to the activation of new plants and modernization of existing plants in the Volga Valley federal district and in Krasnodar Kray, and in the Central federal district. The crushing capacity for soybeans is estimated at approximately 4 MMT, the bulk of which is in Kaliningrad. These facilities work primarily with imported beans, although the facilities have the ability to process rapeseed. Specialized soybean crushing facilities are also located in the Far East, and in the soybean producing provinces of the Central and Southern European Russia.

Trade:

Russian trade in oilseeds in MY 2016/17 will continue to be influenced by several opposing factors, and the volatility of the ruble. If depreciation continues, incentives to export as much product as possible will be very strong. These incentives also include decreased export duties on sunflowerseed and rapeseed and zero export duties on soybeans. Disincentives to export include high and slightly growing domestic demand in protein feeds and vegetable oil. Given that the high domestic demand for oilseeds is based on demand of large agro-holding companies, crushers and feed consumers, domestic demand will prevail over other factors that stimulate exports of raw oilseeds. FAS/Moscow forecasts exports of these major oilseeds in MY 2016/17 at 0.55 MMT, of which 0.4 MMT will be exports of soybeans, primarily from the Far East. Exports are forecast to increase by 15 percent from estimated 0.48 MMT's exports in MY 2015/16. These exports do not include exports of niche oilseed crops such as oil flax, Camelina and Safflower, which, according to some industry analysts may reach 0.4 MMT in MY 2015/16.

Sunflowerseed (HS1206)

FAS/Moscow forecast sunflowerseed exports in MY 2016/17 to increase10,000 MT to 60,000 MT. In MY 2015/16, exports of sunflowerseed dropped 18 percent from last year, to 50,000 MT (FAS/Moscow estimate), despite increased production of sunflowerseed, decreased export duties on sunflowerseed as a result to Russia's WTO commitments, and devaluation of the ruble. Production is still lagging behind the growth of domestic crushing capacity, and very high demand of domestic crushers prevailed over export-stimulating factors. From September 2015 through February 2016, Russia exported only 22,700 MT of sunflowerseed. Russia's major export markets were Turkey (8,800 MT), Azerbaijan (5,300 MT), and Iran (3,500 MT).

Soybeans (HS1201)

FAS/Moscow forecasts soybean exports in MY 2016/17 to increase by 14 percent from last year to 400,000 MT. The increase in exports is principally attributable to larger crop in the Far East, zero export duties on soybeans beginning September 2015 in accord with Russia's WTO commitments, and the devalued ruble. FAS/Moscow estimates soybean exports in MY 2015/16 at 350,000 MT. From September 2015 through February 2016, Russia exported 274,900 MT of soybeans, of which 99.9 percent (274.500 MT) were exported to China.

Meanwhile domestic demand for soybeans is growing stimulated by increasing domestic poultry and swine production and a growth in domestic soybean crushing facilities. This demand is filled primarily by soybeans that are produced in European Russia and by imported soybeans. Delivery of soybeans from the Far East to European Russia, where Russian poultry and livestock industries are concentrated, is too expensive. A relatively good soybean crop in the central FD, symptoms of decreasing rates of development of Russian poultry and swine industries, the devaluation of the ruble and wide use of SPS protective measures by the Russian authorities may slow down imports of soybeans in MY 2016/17. Additionally, imports may be further hampered over Russian GE concerns since imported soybeans are GE varieties. For these reasons, FAS/Moscow lowered its estimate of soybean imports in MY 2015/16 to 2.0 MMT compared with the official USDA estimate at 2.25 MMT, and forecast only a small increase in imports to 2.1 MMT in MY 2016/17.

From September 2015 through February 2016, Russia imported 811,900 MT of soybeans, including 303,800 MT from the U.S., 254,200 MT from Brazil, and 253,800 MT from Uruguay.

Rapeseed (HS1205)

FAS/Moscow estimates exports of rapeseed in MY 2015/16 at 50,000 MT. From July 2015 through February 2016, Russia exported only 25,100 MT of rapeseed, including exports of 13,200 MT to China, 4,3200 MT to Turkey, and 4,400 MT to Germany. At the same time, Russia exported 150,900 MT of rapeseed oil. Thus, the decreased export duty did not appear to influence exports. The domestic crushing capacity continues to grow, and exports of rapeseed oil are forecast to grow faster than exports of seed. FAS/Moscow forecasts exports of rapeseed in MY 2016/17 at 90,000 MT, due to increased production.

Linseed Crops for Oil (Crown Flax, Camelina) and Safflower (HS numbers 1204 and 1207)

Exports of linseed crops for oil were fanned by the devaluation of the ruble and zero export duties on these niche crops. FAS/Moscow estimates exports of these crops in MY 2015/16 at 520,000 MT, a slight decrease from 541,000 MT in MY 2014/15. From July through December 2015, Russia exported 233,000 MT of linseed crops (oil flax) and 158,000 MT of Safflower and other oil crops, a 5 percent drop from the same period in the previous year. Thus, exports of niche crops are much bigger than exports of both sunflowerseed and rapeseed. Most of these niche oilseeds are exported to EU countries, such as Belgium, Austria, Germany, Latvia, and Turkey.

Peanuts (HS1202)

FAS/Moscow forecasts that imports of peanuts will remain in MY 2016/17 at the same level as in MY 2015/16 – 145,000 MT.

Policy:

Russia's WTO commitments (eliminating or decreasing export duties on oilseeds) have been gradually implemented after the first year of Russia's WTO membership (August 2012). The table below shows the final export duties at the end of the transitional period and export duties as of March 2016, the third year of implementation of WTO commitments.

Russia's WTO commitments:

HS No

Name of Product

Export duty before WTO accession

Target export duty

Transitional Period

Export duty from September 2013 through August 2014

Export duty from September 2014 through August 2015

Export duty beginning September 2015

1201

Soybean

20 percent, but not less than 35 Euro per 1 MT

0

3 years

13.33 percent, but not less than 23.33 Euro per 1 MT

6.67 percent, but not less than 11.67 Euro per 1 MT

0

1205

Rapeseed

20 percent, but not less than 35 Euro per 1 MT

6.5 percent, but not less than 11.4 Euro per 1 MT

3 years

15 percent, but not less than 27.13 Euro per 1 MT

11 percent, but not less than 19.26 Euro per 1 MT

6.5 percent, but not less than 11.4 Euro per 1 MT

1206

Sunflowerseed

20 percent, but not less than 30 Euro per 1 MT

6.5 percent, but not less than 9.75 Euro per 1 MT

4 years

16.62 percent, but not less than 24.94 Euro per 1 MT

13.24 percent, but not less than 19.88 Euro per 1 MT

9.88 percent, but not less than 14.81 Euro per 1 MT

1207 50

Mustard seed*

10 percent, but not less than 25 Euro per 1 MT

0

1 year

0

None

None

Resolution No. 786 excludes mustard seeds (1207 50) from the list of products subject to export duties

Source: Russian Customs

Rapeseed, soybeans, and linseed for planting are imported duty-free; import duties on mustard seed, safflower, linseed (not for planting) and sunflowerseed (not for planting) are 5 percent of value; import duties on sunflowerseed for planting is 2.5 percent of value.

Import requirements for oilseeds imported into the Russian Federation are as follows:

- sanitary and phytosanitary control at the border;

- a phytosanitary certificate is necessary, all oilseeds are considered as quarantine products with high phytosanitary risk;

- oilseeds imported into Russia as planting seeds must be registered in the Russian Register of planting seeds;

- a declaration of conformity in accordance with the CU TR “On Safety of Grain" (CU Commission Decision No. 874 of Dec. 09, 2011) is required. Since July 1, 2013, Russia has been regulating the safety and quality of oilseeds both produced domestically and imported as stipulated in the Customs Union Technical Regulation (TR) on Safety of Grain adopted by the Customs Union Commission Decision No. 874 of on December 9, 2011.

Marketing:

Sunflowerseed

Despite a larger crop in MY 2015/16, sunflowerseed prices have increased since the beginning of harvest. According to analytical agencies, there were several reasons for stable high prices for the 2015 sunflowerseed crop:

- In most areas, the crop was harvested in dry weather that provided good conditions for on-farm storage of seeds without drying. Processors tried to lure farmers to sell by offering higher than normal prices;

- Due to decreased import duties on sunflowerseed, demand for exports also increased and was supported by the devaluation of the ruble. In September 2015, export duties were lowered to 9.88 percent of customs value, but not less than 14.81 Euro per metric ton, in accordance with WTO obligations; and

- Increased Russian crushing capacity has increased domestic demand for raw materials. Given these factors, industry analysts consider that the current season favors oilseed producers, and IKAR analysts estimate that the margin for sunflowerseed producers in MY 2015/16 is estimated, depending on provinces, from 44,000 rubles to 47,000 rubles per hectare, which is a record margin for this crop. On the other hand, for processors, high procurement prices and decreasing demand for vegetable oils and meals in the foreign markets will decrease processors returns.

Oilseed, Sunflowerseed

2014/2015

2015/2016

2016/2017

Market Begin Year

Sep 2014

Sep 2015

Sep 2016

Russia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

0

6823

0

6921

0

7100

Area Harvested

6371

6371

6350

6350

0

6600

Beginning Stocks

404

404

135

135

0

190

Production

8374

8374

9095

9095

0

9200

MY Imports

88

88

80

80

0

50

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

8866

8866

9310

9310

0

9440

MY Exports

61

61

50

50

0

60

MY Exp. to EU

5

5

10

10

0

5

Crush

8150

8150

8550

8550

0

8700

Food Use Dom. Cons.

220

220

220

220

0

220

Feed Waste Dom. Cons.

300

300

300

300

0

300

Total Dom. Cons.

8670

8670

9070

9070

0

9220

Ending Stocks

135

135

190

190

0

160

Total Distribution

8866

8866

9310

9310

0

9440

(1000 HA) ,(1000 MT)

Oilseed, Soybean

2014/2015

2015/2016

2016/2017

Market Begin Year

Sep 2014

Sep 2015

Sep 2016

Russia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

1910

1910

2000

2101

0

2200

Area Harvested

1907

1907

2030

2030

0

2150

Beginning Stocks

83

83

109

109

0

119

Production

2362

2362

2640

2640

0

2800

MY Imports

1986

1986

2250

2000

0

2100

MY Imp. from U.S.

348

348

350

350

0

300

MY Imp. from EU

0

0

0

0

0

0

Total Supply

4431

4431

4999

4749

0

5019

MY Exports

312

312

350

380

0

400

MY Exp. to EU

0

0

0

0

0

10

Crush

3650

3650

4000

3800

0

4000

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

360

360

530

450

0

500

Total Dom. Cons.

4010

4010

4530

4250

0

4500

Ending Stocks

109

109

119

119

0

119

Total Distribution

4431

4431

4999

4749

0

5019

(1000 HA) ,(1000 MT)

Oilseed, Rapeseed

2014/2015

2015/2016

2016/2017

Market Begin Year

Jul 2014

Jul 2015

Jul 2016

Russia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

1200

1200

1150

1015

0

1100

Area Harvested

1062

1062

900

894

0

1000

Beginning Stocks

66

66

61

61

0

32

Production

1324

1324

1001

1001

0

1250

MY Imports

24

24

5

5

0

5

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

3

3

3

3

0

0

Total Supply

1414

1414

1067

1067

0

1287

MY Exports

148

148

100

50

0

90

MY Exp. to EU

9

9

30

30

0

50

Crush

1180

1180

920

960

0

1150

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

25

25

25

25

0

20

Total Dom. Cons.

1205

1205

945

985

0

1170

Ending Stocks

61

61

22

32

0

27

Total Distribution

1414

1414

1067

1067

0

1287

(1000 HA) ,(1000 MT)

MEALS

Production:

FAS/Moscow forecasts Russia's total domestic production of the three major oilseed meals in MY 2016/17 to increase to 7.48 MMT, from the estimated 7.17 MMT in MY 2015/16. This forecast includes 3.65 MMT of sunflowerseed meal, a 2 percent increase from the estimated production in MY 2015/16; 3.15 MMT of soybean meal, a 4 percent increase from the estimated production in MY 2015/16; and 0.68 MMT of rapeseed meal, a 20 percent increase from the estimated production in MY 2015/16. Post significantly increased production of rapeseed meal based on the forecast of restored rapeseed production average levels after the poor crop in 2015. FAS/Moscow estimates production of sunflowerseed, soybean and rapeseed meals in MY 2015/16 slightly higher than official USDA's estimates for MY 2015/16. Post's estimates are based on Russia's new crushing capacity and the corresponding increase in crush rates. Also, since crop data are in clean weight, extraction rates will increase. In Russia there are no official statistical data on production of meals, and Post's calculations are based on PSDs for crops and data on trade in different meals.

The fourth significant source of feeds in Russia is fish meal. FAS/Moscow forecasts fish meal production to increase in MY 2016/17 by 10 percent to 160,000 MT due to the forecast of a bigger catch and special state programs aimed at stimulation of the development of the domestic aquaculture sector. However, volumes of fish meal production still remain low.

Consumption:

FAS/Moscow forecasts 2.8 percent increase in domestic consumption of three major oilseed meals in MY 2016/17 to 5.88 MMT, and 27 percent increase in domestic consumption of fish meal, that is aimed exclusively at feeding aquaculture.

Domestic demand for protein feeds, including oilseed meals and fish meal, remains strong, as the domestic poultry and swine industries continue to grow. Although the pace of growth has decreased. FAS/Moscow forecasts a 2 percent growth in the pork sector and a 4 percent growth in the poultry sector in 2016. Leading pork and poultry producers invested sufficient funds in modernization and expansion of facilities in previous years: some companies completed construction and started operations on new facilities in 2015. These investments are now contributing to ongoing production growth. However, the pace of meat production growth in 2016/17 is anticipated to slow compared to the growth seen in 2014 and 2015 as meat producers experienced downward pressure on margins due to accelerated inflation and the ruble devaluation. Producers' expenses for genetics, equipment, feed additives, veterinary drugs, vaccines, transportation and utilities have been growing. At the same time, opportunities for sales price increases are limited; the elasticity of demand for red meats and poultry has increased during the crisis as consumers' purchasing power weakened. Margins in the meat production sectors are expected to further decrease in 2016. Competition between industrialized producers will most likely intensify, and more efficient companies will continue their expansion to the detriment of less efficient producers. Thus, consumption of protein feeds will grow, but since production will be concentrated at large agro-holding companies with intensive feeding, this growth will be slow.

Trade:

Imports

Russia's imports of oilseed meals consist of soybean meal. Imports of sunflower meal and rapeseed meal are sporadic and very small. Soybean meal imports in MY 2016/17 will be driven by consistent demand of Russian poultry and livestock industries in protein feeds, and despite the ruble devaluation imports of soybean meal will remain the same as in MY 2015/16 – 550,000 MT. Imports of soybean meal in MY 2016/17, as well as in the second half of MY 2015/16, may also be supported by some problems with the registration of GE stack lines in Russia which may affect imports of whole beans. FAS/Moscow estimates imports of meal in MY 2015/16 at 550,000 MT that is 20,000 MT higher than the USDA estimate. From September 2015 through February 2016, Russia imported 232,400 MT of soybean meal. The major suppliers of soybean meal to Russia were Latvia (155,000 MT), Brazil (24,4000 MT), Argentina (19,000 MT), and Germany (18,100 MT).

Exports

Due to the depreciated ruble and increased crushing capacity, Russia will continue to export oilseed meal, but strong domestic demand and strong competition with abundant soybean meal in the world markets may limit incentives to increase exports. However, FAS/Moscow forecasts that exports will increase only by 6 percent from 2.07 MMT in MY 2015/16 to 2.25 MMT in MY 2016/17. FAS/Moscow estimate of exports in MY 2015/16 is lower than the USDA official estimate mostly due to lower estimate of soybean exports.

FAS/Moscow forecasts sunflowerseed meal exports in MY 2016/17 at 1.5 MMT, which is only 2 percent higher than the estimated 1.47 MMT's exports in MY 2015/16. From September 2015 through February 2016, Russia exported 751,000 MT of sunflowerseed meal. The main markets for Russia's sunflowerseed meal in this period were Turkey (205,400 MT), Latvia (195,700 MT), Italy (123,800 MT), Spain (45,100 MT), and Denmark (43,600 MT).

FAS/Moscow forecasts soybean meal exports in MY 2016/17 at 400,000 MT, 14 percent more than in MY 2015/16. FAS/Moscow forecasts that domestic demand for soybean meal will remain strong. Despite the ruble devaluation, Russia's soybean meal exports will not reach levels of MYs 2013/14 and 2014/15. FAS/Moscow decreased its estimate of soybean meal exports in MY 2015/16 to 0.35 MMT compared with the USDA's official estimate of 0.45 MMT. From September 2015 through February 2016, Russia exported 201,200 MT of soybean meal, 19 percent less than in the same period in MY 2014/15. The main markets for Russia's soybean meal exports were Poland (55,100 MT), Netherlands (40,300 MT), Uzbekistan (35,100 MT), and Norway (16,100 MT). According to industry analysts, the bulk of soybean meal shipments to Europe were from crushing facilities in Kaliningrad.

Policy:

Imports of soybean meal (HS number 2304) are duty free. Import duties on cotton meal (HS number 2306 10), flax meal (HS number 2306 20), rapeseed meal (HS number 2306 41 and 2306 49), and sunflowerseed meal (HS number 2306 30) are subject to a duty of 5 percent of the customs value. Exports of these meals are duty-free.

All imported meals must be registered with the Russian Federal Service for Veterinary and Phytosanitary Surveillance (VPSS) as feed, in accordance with the requirements of the Russian Federation for registration of feeds.

Meal, Sunflowerseed

2014/2015

2015/2016

2016/2017

Market Begin Year

Sep 2014

Sep 2015

Sep 2016

Russia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

8150

8150

8550

8550

0

8700

Extr. Rate, 999.9999

0.4104

0.4104

0.4105

0.4187

0

0.4195

Beginning Stocks

228

228

194

194

0

159

Production

3345

3345

3510

3580

0

3650

MY Imports

3

3

5

5

0

0

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

3576

3576

3709

3779

0

3809

MY Exports

1332

1332

1500

1470

0

1500

MY Exp. to EU

1000

1000

1000

1000

0

1000

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

2050

2050

2100

2150

0

2200

Total Dom. Cons.

2050

2050

2100

2150

0

2200

Ending Stocks

194

194

109

159

0

109

Total Distribution

3576

3576

3709

3779

0

3809

(1000 MT) ,(PERCENT)

Meal, Soybean

2014/2015

2015/2016

2016/2017

Market Begin Year

Sep 2014

Sep 2015

Sep 2016

Russia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

3650

3650

4000

3800

0

4000

Extr. Rate, 999.9999

0.7879

0.7879

0.788

0.7947

0

0.7875

Beginning Stocks

58

58

121

121

0

91

Production

2876

2876

3152

3020

0

3150

MY Imports

542

542

530

550

0

550

MY Imp. from U.S.

10

10

10

30

0

30

MY Imp. from EU

150

150

150

150

0

100

Total Supply

3476

3476

3803

3691

0

3791

MY Exports

505

505

450

350

0

400

MY Exp. to EU

70

70

100

40

0

40

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

2850

2850

3250

3250

0

3300

Total Dom. Cons.

2850

2850

3250

3250

0

3300

Ending Stocks

121

121

103

91

0

91

Total Distribution

3476

3476

3803

3691

0

3791

(1000 MT) ,(PERCENT)

Meal, Rapeseed

2014/2015

2015/2016

2016/2017

Market Begin Year

Jul 2014

Jul 2015

Jul 2016

Russia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

1180

1180

920

960

0

1150

Extr. Rate, 999.9999

0.5949

0.5949

0.5946

0.5917

0

0.5913

Beginning Stocks

0

0

0

0

0

0

Production

702

702

547

568

0

680

MY Imports

10

10

15

0

0

0

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

1

1

1

0

0

0

Total Supply

712

712

562

568

0

680

MY Exports

299

299

250

250

0

300

MY Exp. to EU

258

258

150

150

0

200

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

413

413

312

318

0

380

Total Dom. Cons.

413

413

312

318

0

380

Ending Stocks

0

0

0

0

0

0

Total Distribution

712

712

562

568

0

680

(1000 MT) ,(PERCENT)

Meal, Fish

2014/2015

2015/2016

2016/2017

Market Begin Year

Oct 2014

Oct 2015

Oct 2016

Russia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Catch For Reduction

550

550

550

550

0

600

Extr. Rate, 999.9999

0.2636

0.2636

0.2636

0.2636

0

0.2667

Beginning Stocks

2

2

2

2

0

2

Production

145

145

145

145

0

160

MY Imports

23

23

25

25

0

30

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

170

170

172

172

0

192

MY Exports

59

59

60

60

0

50

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

109

109

110

110

0

140

Total Dom. Cons.

109

109

110

110

0

140

Ending Stocks

2

2

2

2

0

2

Total Distribution

170

170

172

172

0

192

(1000 MT) ,(PERCENT)

OILS

Production:

FAS/Moscow forecasts Russia's total vegetable oil production (sunflowerseed, soybean and rapeseed) in MY 2016/17 at 4.82 MMT, nearly 0.2 MMT more than in MY 2015/16.

Sunflowerseed remains the primary oilseed crop in Russia. Vegetable oil is still the main product for Russian crushers, while meal remains a secondary product. FAS/Moscow forecasts production of sunflowerseed oil in MY 2016/17 at 3.65 MMT, 2 percent more than FAS/Moscow estimates for MY 2015/16. FAS/Moscow estimates of sunflowerseed oil production are 50,000 MT higher than official USDA's estimates due to a slight increase in the extraction rate caused by recalculation of oilseeds in clean weight. In addition, Post considered improved Russian crushing facilities in deriving its estimates.

Production of soybean oil has been increasing along with the growth of domestic soybean production. Additionally, large imports of soybeans have continued. FAS/Moscow forecasts MY 2016/17 soybean oil production at 0.72 MMT, a 5 percent increase from the estimated soybean oil production in MY 2015/16. Production of rapeseed oil is forecast at 0.45 MMT, a 19 percent increase from the estimated production in MY 2015/16.

Production of other vegetable oils (such as oil from flax, Camelina, and other niche oilseed crops) is increasing along with the increase of production of these oilseeds, but there are no data on production of these vegetable oils. Industry analysts estimate that the share of production of these niche oils in total vegetable oil production, is smaller than their share in oilseeds production because a large portion of these niche crops is exported. If these crops are crushed, then the crushing is at smaller plants or on-farm, and the extraction rate is low.

Consumption:

Russia's per-capita vegetable oil consumption (food and industrial) is estimated at 22-23 liters per capita per year. This is a consumption rate that is lower than in Europe or in the United States. Russia does not produce bio-diesel, and vegetable oil is consumed as food or as a processed food ingredient for products such as mayonnaise, margarine, cooking oils, etc. The soft ruble in MYs 2014/15 and 2015/16, stimulated exports of vegetable oils, but domestic consumption still comprises over 55 percent of Russian's total supply (production and imports) of vegetable oils. There is no official data on the domestic consumption of vegetable oils by type of oil, but industry analysts estimate that sunflowerseed oil dominates food use consumption (including in production of mayonnaise), while palm oil is gaining a bigger share in food processing use (including in the confectionary industry, in spreads, in margarine, etc.). According to industry analysts, in 2015 direct consumption of vegetable oil in food increased, while consumption of vegetable oil in food products, such as mayonnaise and other processed products, decreased. Analysts attribute this to price inflation and a decrease in consumers' purchasing power.

FAS/Moscow increased the forecast of domestic food consumption of sunflowerseed oil in MY 2016/17 to 1.65 MMT from the estimated food consumption in MY 2015/16 at 1.6 MMT.

Trade:

FAS/Moscow forecasts further increases in Russia's exports of vegetable oils, to 2.35 MMT in MY 2016/17 from an estimated 2.16 MMT in MY 2015/16. Sunflowerseed oil exports are forecast at 1.6 MMT (up 0.1 MMT from last year). Soybean oil exports are forecast at 445,000 MT (up 30,000 MT from last year), and rapeseed oil exports are forecast at 0.3 MMT (up from 240,000 MT in MY 2015/16. Exports of sunflowerseed oil and rapeseed oil will be stimulated by the soft ruble. Soybean oil exports will depend primarily on imports of soybeans, because the major Russian importer of soybeans, located in Kaliningrad, sells most of its meal to the domestic market and sells the soybean oil to foreign markets.

Sunflowerseed oil

FAS/Moscow forecasts sunflowerseed oil exports in MY 2016/17 at 1.6 MMT, a 6.7 percent increase from MY 2015/16 due to a larger crush. Traders continue to develop foreign markets for sunflowerseed oil. From September 2015 through February 2016, Russia exported almost 503,400 MT of crude sunflowerseed oil, and 140,800 MT of refined oil.

Soybean oil

FAS/Moscow forecasts that soybean oil exports will continue to increase steadily from 415,000 MT in MY 2015/16 to 445,000 MT in MY 2016/17. The major driver of these exports will be Kaliningrad oblast, which crushes imported soybeans and exports the oil. From September 2015 through February 2016, Russia exported 220,500 MT of soybean oil, the same volume as in the same period last year. The major destinations for Russia's soybean oil exports were Algeria – 110,500MT, China – 28,400MT, Denmark – 16,500MT, and Tunisia – 9,420 MT.

Rapeseed oil

FAS/Moscow forecasts Russia's exports of rapeseed oil in MY 2016/17 at 0.45 MMT, 19 percent increase from last year, which was a year of low exports because of low rapeseed production in Russia. From July 2015 through February 2016, Russia exported 160,700 MT of rapeseed oil. Russia's major markets for rapeseed oil exports were Norway (80,100 MT), Lithuania (26,400 MT), China (17,150 MT), Czech Republic (12,710 MT), and Latvia (11,600 MT).

Policy:

Beginning July 1, 2013, Russia began regulating production of vegetable oils via safety and quality requirements as stipulated in the Customs Union Technical Regulation (TR) on Oils and Fats adopted by the Customs Union Commission No. 883 on December 9, 2011.

In 2015 and in the beginning of 2016, the Russian Ministry of Agriculture and mass media launched a campaign against the use of palm oil in food products, especially in products that are positioned as “dairy". However, so far no changes in either trade policy, or in the policy on food product labeling food have been made.

Oil, Sunflowerseed

2014/2015

2015/2016

2016/2017

Market Begin Year

Sep 2014

Sep 2015

Sep 2016

Russia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

8150

8150

8550

8550

0

8700

Extr. Rate, 999.9999

0.413

0.413

0.4129

0.4187

0

0.4195

Beginning Stocks

87

87

56

56

0

146

Production

3366

3366

3530

3580

0

3650

MY Imports

3

3

10

10

0

10

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

3456

3456

3596

3646

0

3806

MY Exports

1450

1450

1500

1500

0

1600

MY Exp. to EU

100

100

100

100

0

100

Industrial Dom. Cons.

370

370

370

370

0

400

Food Use Dom. Cons.

1550

1550

1600

1600

0

1650

Feed Waste Dom. Cons.

30

30

30

30

0

30

Total Dom. Cons.

1950

1950

2000

2000

0

2080

Ending Stocks

56

56

96

146

0

126

Total Distribution

3456

3456

3596

3646

0

3806

(1000 MT) ,(PERCENT)

Oil, Soybean

2014/2015

2015/2016

2016/2017

Market Begin Year

Sep 2014

Sep 2015

Sep 2016

Russia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

3650

3650

4000

3800

0

4000

Extr. Rate, 999.9999

0.1792

0.1792

0.1793

0.1795

0

0.1793

Beginning Stocks

25

25

18

18

0

17

Production

654

654

717

682

0

717

MY Imports

2

2

2

2

0

1

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

2

2

0

0

0

0

Total Supply

681

681

737

702

0

735

MY Exports

423

423

445

415

0

445

MY Exp. to EU

150

150

160

160

0

160

Industrial Dom. Cons.

30

30

35

30

0

31

Food Use Dom. Cons.

210

210

240

240

0

230

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

240

240

275

270

0

261

Ending Stocks

18

18

17

17

0

29

Total Distribution

681

681

737

702

0

735

(1000 MT) ,(PERCENT)

Oil, Rapeseed

2014/2015

2015/2016

2016/2017

Market Begin Year

Jul 2014

Jul 2015

Jul 2016

Russia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

1180

1180

920

960

0

1150

Extr. Rate, 999.9999

0.3924

0.3924

0.3924

0.3927

0

0.3913

Beginning Stocks

9

9

9

9

0

16

Production

463

463

361

377

0

450

MY Imports

3

3

1

0

0

0

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

1

1

1

0

0

0

Total Supply

475

475

371

386

0

466

MY Exports

346

346

240

240

0

300

MY Exp. to EU

117

117

150

150

0

150

Industrial Dom. Cons.

20

20

20

20

0

20

Food Use Dom. Cons.

100

100

100

110

0

130

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

120

120

120

130

0

150

Ending Stocks

9

9

11

16

0

16

Total Distribution

475

475

371

386

0

466

(1000 MT) ,(PERCENT)

Oil, Palm

2014/2015

2015/2016

2016/2017

Market Begin Year

Oct 2014

Oct 2015

Oct 2016

Russia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

0

0

0

0

0

0

Area Harvested

0

0

0

0

0

0

Trees

0

0

0

0

0

0

Beginning Stocks

49

49

101

101

0

69

Production

0

0

0

0

0

0

MY Imports

854

854

770

770

0

700

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

903

903

871

871

0

769

MY Exports

2

2

2

2

0

0

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

150

150

150

150

0

150

Food Use Dom. Cons.

650

650

650

650

0

550

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

800

800

800

800

0

700

Ending Stocks

101

101

69

69

0

69

Total Distribution

903

903

871

871

0

769

(1000 HA) ,(1000 TREES) ,(1000 MT)