Last year was quite positive for the Russian oil and fat sector due to a good harvest and high prices. But now it would be nice to save the achievements.
As Mikhail Maltsev, executive director of the Russian Oil and Fat Union, noted, the industry is now experiencing a “rebound” after growth last year.
First of all, this is due to the fact that global oil prices have dropped significantly.
However, a good harvest of major oilseeds is also expected this season, despite the fact that we have large carry-overs from last year.
The fact that farmers have decided not to reduce production volumes is positive.
However, it is now very important for Russia to achieve two goals: to maintain its position in the world market, and also to maintain the marginality of agricultural producers.
It is unlikely to be possible without state support
Experts believe that the state should at least compensate for the discount with which Russian farmers have to sell their products.
Due to sanctions and other factors, it becomes difficult for it to compete in the global market without offering a discount.
The situation is further complicated by dumping by Ukraine. True, now that the grain deal is no longer in effect, the situation may improve in this regard.
If the state thought out ways to support farmers, this would help them maintain marginality, which is very important for companies to have a desire to continue to show high production volumes, and not curtail it.
However, at the same time, as Maltsev noted, various sources take information from somewhere about the “mythical margin” of farmers, presenting the situation in such a way that the margin is already large, and there is no need to increase it anymore.
However, according to Maltsev, this is far from the case.
In addition, the state of the fat-and-oil complex differs from how raw material producers feel.
After all, despite the fact that oil is much more expensive, buttermakers receive only a small share of the margin, everything else goes to producers of raw materials.
Naturally, if this indicator were increased, it would also help processors a lot.
In spite of everything, good oilseed harvests are expected in Russia this season.
For example, the US Department of Agriculture predicts that about 16.5 million tons of sunflower can be harvested, with oil production at about 6.36 million tons.
Sunflower oil exports are expected to grow by 3.7% to 4.1 million tons.
Domestic analysts predict sunflower harvest from 15.7 to 16 million tons, rapeseed — at the level of 4 million tons, soybeans — from 5.7 to 6.5 million tons.
