Russia may introduce measures to curb the rise in prices for sunflower oil

Source: oilworld.ru

At a meeting of the subcommittee on customs-tariff and non-tariff regulation, protective measures in foreign trade of the government commission for economic development and integration on November 9, the proposal of the Oil and Fat Union and the Russian Ministry of Agriculture on the introduction of a permissive procedure for the export of sunflower seeds will be considered, the Ministry of Economic Development told RG.

This procedure was already in force in Russia from July 1 to August 31. And before him, from April 12 to June 30, it was completely forbidden to export sunflower outside the EAEU from Russia. The last time the Fat and Oil Union insisted on such measures, arguing this by the underutilization of Russian oil and fat enterprises. If the seeds themselves are not enough, and abroad they give a good price, the agrarians strive to make money on exports, and the domestic prices for the scarce seed also begin to rise, the union argued. However, it was not possible to avoid the rise in prices for both sunflower and sunflower oil even after the restrictions were imposed. And by the end of October, they even reached record levels and continued to grow. As market experts explained, the oil and fat market is export-oriented: Russia exports about half of the oil produced, and prices on the domestic market are based on world prices. At the same time, according to the Food and Agriculture Organization of the United Nations (FAO), prices for vegetable oils are growing rapidly and, according to the results of October, reached a maximum in the last nine months. In addition, the weakening of the ruble affected.

Meanwhile, the Fat and Oil Union planned to expand the practice of restrictions on sunflower exports in the new season. Leaving the seed inside the country, the union hoped to load processing capacities and export products with a higher added value.

But this time the Fat and Oil Union also saw a threat from Turkey, which recently reduced the import duty on sunflower seeds from 3% plus 100 euros per ton (about 24% in total) to 0%. According to the Union’s estimates, this may lead to a rise in sunflower prices by more than a quarter (more than 10 thousand rubles per ton). And the majority of farmers, in anticipation of price increases, have already suspended sales, says Mikhail Maltsev, executive director of the Russian Fat and Oil Union. He is confident that, if the export of sunflower is not limited, the net loss in the processing of oilseeds in Russia will be from 20 to 30%, depending on the region.

“It is logical that, given the poor sunflower harvest in Russia and Ukraine, as well as rapeseed in Europe, oilseed importers on the world market have become more active and are changing the terms of trade in order to protect their processing enterprises. We, in turn, must respond symmetrically and meet the internal needs of processors Otherwise, the risk of a complete shutdown of the oil and fat industry becomes quite obvious.In recent years, more than 300 billion rubles have been invested in the industry, more than 30 thousand people may be unemployed. , in fact, will go to the support of Turkish converters “, – the expert is categorical.

At the same time, according to the vice-president of the Russian Grain Union Alexander Korbut, Russian farmers have long known about the abolition of duties by Turkey – this practice is used by the country annually to support its producers. Therefore, the Russian sunflower exporters have already taken this news into account in the current price, and one should not expect further serious growth in sunflower prices. In addition, the reduction by Turkey of duties on sunflower oil from 36 to 10% can also partly “console” Russian producers of fat and oil products – such a decision is now being discussed.

According to the Center for Agroanalytics under the Ministry of Agriculture, since the removal of all export restrictions (from September 1) to the beginning of October, the export of sunflower seeds has increased 10.2 times. Last season, sunflower exports amounted to 1.25 million tons, and a year earlier – only 361 thousand tons. Without restrictions this season, the export of sunflower can double more – up to 2.5 million tons, according to the Fat and Oil Union.

In mid-October, the Ministry of Agriculture also called for the introduction of a permissive procedure for the export of sunflower through exchange trading, which should ensure the most transparent pricing. High export demand, a decrease in sunflower harvest in the largest exporting countries of sunflower oil (Russia and Ukraine) and the devaluation of the ruble lead to an increase in the price of sunflower and, as a result, the price of sunflower oil, the Ministry of Agriculture explained.

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