Russia pulling back the shroud of uncertainty from the new oilseed season

This season’s sunseed and soybean complex exports are at their second highest levels, except for soybean exports that remain at the record high and much ahead of last year (because of boosted shipments to China), UkrAgroConsult reports.

Significant domestic price growth because of global oilseed complex trends entailed the application of state regulatory measures:

- export tariffs for sunflower seed, soybeans, and rapeseed at a rate of 30% (effective until June 30, 2021). This step has failed to achieve its primary goal – bringing down domestic prices – but reduced raw material exports to zero. It is projected to increase the rate to 50% from July 1, 2021 till September 1, 2022, which will essentially become a prohibitive duty. It was found expedient to extent the rapeseed export tariff of 30% for the same period of time;

- an agreement between producers and retail networks on curbing growth of retail sunflower oil prices (effective from December 2020 till April 1, 2021). The Ag Ministry of Russia suggests extending the agreement until October 2021;

- it is projected to offset the retail price restrictions with subsidies for producers of bottled sunflower oil (tentatively totaling RUB 8 Bl, for the period from April 1 till October 1, 2021). The subsidies will be charged at a rate of RUB 10 per each liter of the product sold via retail stores for the fixed price;

- the government has stopped to partially compensate for the costs of transporting sunflower oil for export;

Regulatory policy has become a feature of this season because of an acute need to protect domestic consumers.

The first acreage forecasts of the Russian Ag Ministry for the new marketing year 2021/22 envisage a decrease in sunflower plantings, rise in soybean and rapeseed acreage.