Russia Extends Export Duties on Sunflower Oil, Meal, and Seeds

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Aug 15, 2022 | Agricultural Markets

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In April, Russia increased Sunflower Oil production to a record 738 thousand tons due to high external demand amid difficulties in supplying Ukrainian goods to the world market. However, Russia exported 2.1 million tons of vegetable oil in the H1 of 2022. This figure is 13% lower than the supply volumes of the same period in 2021. Meantime, external supplies of oilseeds increased to 1.5 million tons, which is 18% more than exports in the first six months of 2021.

This year’s Sunflower harvest is expected to be better than last year’s. According to forecasts, this will allow Russian processors to produce 5.6-5.8 million tons of Sunflower Oil. But, Sunflower Oil exports are expected to fall by 0.5 million tons, despite the last year’s record harvest of this crop. Main export destinations are Iran, India, China, Turkey, and Egypt. Sunseed Oil export to Turkey declined by 22% in H1, reaching 1.4 million tons.  

According to the Agflow data, Sunseed oil led the country’s Vegoils export by 550,000 tons in March-July, followed by rapeseed oil, soybean oil, and other Vegoils. In terms of the production of unrefined crude Vegetable Oil, Sunseed Oil dominates in the local market with 78% share, followed by Rapeseed Oil (11%), Soybean Oil (10%), and others (1%). Sunseed Oil is still leading the market by 91% for Refined Oil. The following performers are Rapeseeds Oil (2%), Soybean Oil (2%), and others (5%).

Sunflower oil export sales by million USD

The floating export duty on Sunflower Oil was introduced on September 1, 2021, and was supposed to expire on September 1 this year. However, export duties on Sunflower Oil, Sunflower Meal, and Sunflower Seeds have been extended until August 31, 2023. Initially, a duty of 70% was levied on the difference between the base price (US$1,000 per ton) and the monthly average market price, reduced by a correction factor (US$50 per ton).  

Now, that will be invoiced in rubles. For Sunflower Oil, the base will be 82,500 rubles per ton (instead of $1,000 before), for Meal – 13,875 rubles per ton (previously $185). The market is still adapting to floating duties on Sunflower Oil.

Rapeseed Supply From the Far East

External supplies of Rapeseed are prohibited in Russia from April 1 to August 31, 2022. The reason for the restriction was the risk of a shortage of the product in the country and the need to contain prices. The Ministry of Agriculture of the Russian Federation has prepared a draft resolution to allow the supply of rapeseed from the Far East and Kaliningrad. The measure can be introduced from September 1, 2022, to August 31, 2023.

According to the document, suppliers are allowed to export Rapeseed through railway, road (section of the border between Russia and China), mixed, river, and sea checkpoints. Zabaikalsk, Khasan, Blagoveshchensk, Khabarovsk, Vanino, Vladivostok, and Okhotsk ports are mentioned.

Rapeseed exports to EAEU countries totaled 0.2 million tons in the H1, up 36% over a year. Rapeseeds Oil to China also increased by 23% over a year, reaching 0.4 million tons. According to Rosstat, the production of unrefined Rapeseed Oil increased by 44% in the first 3 months of this year – from 145 thousand tons to 209 thousand tons compared with the same period of 2021. 

The export of Rapeseed Oil from Russia is growing every year. A further increase in Rapeseed Oil production will be facilitated by its export potential – high demand in the European and Asian markets, where it is famous not only as a food ingredient but also as a raw material for biofuels.

 

 

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