The Ministry of Agriculture wants to recommend that the manufacturer suspend the sale of such products abroad for a while, since prices have fallen very much.
This week, the MOA plans to discuss such a restriction. It is not yet clear whether this is only a recommendation, or whether it will be a ban.
As Deputy Minister of Agriculture of Russia Oksana Lut noted, a meeting with producers is not planned. Most likely, they will simply be put before the fact.
Indeed, prices have fallen very significantly, and in a short time. In just 1.5 weeks, sunflower oil fell from $1,100 to $800 per ton, sunflower from $600 to $400, and wheat from $280 to $250 (deliveries in May).
At the same time, a year ago, the cost of wheat was about $400 per ton.
What causes the price drop?
According to Vladimir Petrichenko, General Director of the ProZerno analytical agency, one of the main factors is the grain deal between Russia and Ukraine.
According to it, Ukrainian grain continues to enter the world markets. According to Petrichenko, this is a very strange policy: to allow access to products from an unfriendly country, while blocking its own farmers.
The second reason is the high results of last season’s harvest.
Both Russia and other countries have collected high, sometimes simply record-breaking grain and oilseed crops, which also caused a decrease in prices.
What are the prospects for manufacturers?
They have less and less room to maneuver. Export, although not banned yet, is in fact still impossible because prices are low and duties are high.
It is also not easy to sell products inside the country: the fall in world prices has led to a decrease in domestic ones. For example, over the past couple of weeks, sunflower has fallen in price from 30 thousand rubles per ton to 20 thousand.
By the way, it is generally forbidden to export it in order to provide work for Russian processors.
However, at any price, it is impossible to sell the available amount of grain and oil within the country, since consumption is many times less than the volume produced.
Now the export potential for wheat is 12 million tons, in general for grain — 16 million tons.
At present, the Ministry of Agriculture seems to be advising farmers to “just wait” until prices rise.
However, taking into account the full warehouses and the lack of clear prospects, many may decide to reduce the area under crops, because the decision of the Ministry of Agriculture may coincide with the start of sowing.
