Market News : Russian government allocates about 5 billion rubles. to stimulate the production of oilseeds. Sunflower oil exports may increase by 70% by the end of the season. Thus, Russia becomes the No. 1 exporter of this product. Aif.ru tried to figure out what this would give Russia.
Prime Minister Mikhail Mishustin said at a government meeting that Russia is moving from fifth to first place in the world in the export of sunflower oil. This year, the volumes of butter produced in the country will exceed the norms of the Food Security Doctrine by more than two times, reaching 200%.
The government will support the growth of the industry by allocating 4.8 billion rubles. to stimulate the production of soybeans, rapeseed, sunflower, flax and other oilseeds in 43 regions. The government incentive payment will help, first of all, producers of other vegetable oils, which are experiencing some difficulties due to fluctuations in the world market.
According to experts, this time the sunflower harvest will exceed 16 million tons. Last year it reached 15.5 million tons.
Mikhail Maltsev, director of the Oil and Fat Union, told aif.ru that record harvests have been in the industry for several years. Sunflower accounts for about 62–67% of the gross harvest of oilseeds. Sunflower processing is developing almost as rapidly, without government subsidies, the expert noted.
Enterprises involved in the production of vegetable oils occupy a leading position in the agro-industrial complex of Russia. The industry has well-established logistics and infrastructure. In the market, large enterprises unite, while small ones go bankrupt and gradually leave the market. Production this season should be 7 million tons, with an average consumption of 2.4 million tons.
Russia will inevitably take first place in the world due to problems with production and exports from the once main oil exporter – Ukraine, the expert has no doubt. 4.7 million tons will be exported, so the export of sunflower oil should increase by 70% compared to the previous season.
“Given the record harvest and significant carry-overs, next season 2022/2023 we will have 300% supply,” says Mikhail Maltsev. “We expect to increase the export of all domestic oil and fat products abroad by 35%.”
The traditional importers of Russian sunflower oil are Turkey, China, the EAEU countries, Iran, this season India and Egypt have significantly increased their volumes.
“Since vegetable oil is a processed product, and wheat is not, it is clear that such exports will be more profitable compared to an unprocessed product,” the expert argues. It is too early to talk about changes in the labor market or an increase in tax revenues, he said: sunflower oil producers pay taxes, but so far they are coping with production with existing capacities. As for the cultivation of sunflower and oilseeds, since employment in this sector is seasonal, it does not significantly affect the labor market.