During several recent seasons, Russian agrarians actively expanded their planted areas under soybeans, which contributed to growing of its share in the general structure of oilseed crops areas, and reached 21% in the current season. All regions of the country demonstrated the growth of soybean areas, and in the Far East it even became one of the major crops.
Thus, only in 2016/17 MY the planted areas increased by 2.9%, and the general harvest again broke a record, and grew by 14.7%.
Soybeans
In the season-2016/17, the planted areas under soybeans totaled 2.2 mln ha (up 2.9%). As a result, Russian agrarians again produced a record harvest, which APK-inform Agency estimated at 3.1 mln tonnes (2.7 mln tonnes in 2015/16 MY). Also, the average yield was rather high - 1.48 t/ha (up 13.8%).
At the same time, the consumption volumes of soybeans in Russia continue growing, and still exceed the supply of Russian-origin oilseed. APK-Inform Agency forecasted that in 2016/17 MY the figure will total 4.6 mln tonnes, up 6.7% compared with the previous season. The growth in domestic consumption primarily developed due to enlarging of the livestock industry in the country.
The growing demand of livestock breeders for protein products stimulates the further increasing of soybean processing volumes, and further growth of production capacities.
So, in the season-2016/17 Russia plans to launch a number of enterprises for oilseed processing. Group of companies Agribusiness will launch a line for production of soybean oil and cake in Lipetsk oblast. The initial production capacities of the line will total nearly10 thsd tonnes per year, with the possibility of further increase in 2-5 times. At the same time, in February 2017 there was opened and launched the oil-extraction plant Amursky for deep processing of soybeans, which has a line of food and forage extraction in order to receive white soy petals and soybean oil, as well as feed meal. The first stage provides production of soybean meal and oil, which annual capacity totals 240 thsd tonnes of soybeans. The company plans to launch the second stage for deep processing of soybeans in 2018 only.
LLC Soy protein products plans to build a plant for deep soybean processing in Stavropol Krai. The project capacity will total 170 thsd tonnes of soybean products per year (soybean oil, lecithin, concentrate, molasses, isolate, etc.). However, the exact date of the project realization is unknown yet.
Due to the constant deficit of raw materials for complete securing of the domestic consumption and processing, Russia has a significant dependence on soybean imports. However, in the current season the figures somewhat reduced. According to APK-Inform estimations, the imports will total 1.9 mln tonnes, against 2.09 mln tonnes in 2015/16 MY, due to record harvest volumes of the oilseed in the country. We should note that in September-January of 2016/17 MY Russia already imported more than 830 thsd tonnes of soybeans. Therefore, until the end of the season Russia will additionally import 1.1 mln tonnes of soybeans. In the current season, the list of main countries-exporters of soybeans to Russia included Brazil (61%), Croatia (23%) and Uruguay (16%).
At the same time, the country also started reducing the exports of soybeans, which in 2016/17 MY will total 400 thsd tonnes, against 456 thsd tonnes last season. Opening of new production capacities influenced at reduction of the figures, in particular in the Far East (oil-extraction plant Amursky). As a reminder, Russia exports the major volumes of soybeans from the Far East, due to China's high demand, convenient logistics and zero export duties in 2015.
Price situation
The Southern and Central Federal Districts started harvesting soybeans in late September, which contributed to increase of trading and purchasing activities in the market segment. Agrarians of the Siberian and Far Eastern Districts started harvesting soybeans in early October. Therefore, the bid prices somewhat reduced in the first ten-day period of October, due to the surge of raw commodity offers.
So, in the Southern District the purchasing prices varied within 28`000-30`000 RUR/t СРТ, in the Central District - 22`000-25`000 RUR/t СРТ, the Siberian District - 28`000-30`000 RUR/t СРТ, and the Far Eastern District - 26`000-28`000 RUR/t СРТ.
In March 2017, the bid prices declined due to the growth in a number of proposals of oilseed raw material on the market. The purchasing prices in the Southern District fell to 26`000-28`000 RUR/t CPT, the Central District - 21`000-23`000 RUR/t CPT, and the Siberian District - 26`000-28`000 RUR/t CPT.
Soybean oil
In the season-2016/17, the market of soybean oil increased all indicators. According to APK-inform analysts, soybean oil production will rise to 780 thsd tonnes, against 767 thsd tonnes in 2015/16 MY. In such terms, the exports of soybean oil will increase to a record level - 460 thsd tonnes, against 428 thsd tonnes in 2015/16 MY.
In September-January of 2016/17 MY, the list of main importers of Russian soybean oil included Algeria (49%), Tunisia (15%) and Venezuela (7%).
It is worth noting that the domestic consumption will also increase, and APK-inform analysts estimated the figure at 320 thsd tonnes (up 10.3%). And the imports will grow to 2 thsd tonnes (1.1 thsd tonnes in 2015/16 MY).
Price dynamics
In the beginning of the season, the soybean oil segment declined its selling prices, due to similar trends on the market of soybeans, as well as the planned increase in the supply capacities. But demand rates were low, because buyers were not ready to purchase soybean oil at the announced offer prices.
The offer prices in the Southern District varied within 45`000-47`000 RUR/t EXW, and in the Central District - 47`000-51`000 RUR/t EXW.
In January-March period, the market demonstrated a bearish trend, due to lower demand and plans of sellers to involve more buyers. So, at the end of March the selling prices in the Southern District fell to 41`000-43`000 RUR/t EXW, in the Central District - 43`000 44`000 RUR/t EXW. However, the sales rates were still low.
Soybean meal/cake, extruded soybeans
Also, in the current season the market of soybean by-products will demonstrate the growth of some indicators. So, according to APK-inform analysts, the production of soy protein products will increase to 3.2 mln tonnes, as opposed to 3 mln tonnes last season.
The figure will increase due to the annual growth of consumption on the domestic market. In the season-2016/17, the figure will total 3.2 mln tonnes (2.9 mln tonnes in 2015/16 MY).
Due to increased consumption rates, in the current season the export volumes of soybean meal and cake will reduce to 430 thsd tonnes (down 9.3%). The imports will decrease to 340 thsd tonnes (down 8.8%).
Price situation
In the beginning of the season-2016/17, the market of soybean cake/extruded soybeans started reducing the supply prices, due to both seasonal factor and low sales rates. Producers received sufficient volumes of the product, and were ready to enter into long-term contracts. By late September, the prices totaled 32`000-35`000 RUR/T EXW.
It is worth noting that the growth in production capacities and market overstocking also had a significant impact on the trading activity in the market segment.
In December-March period, many sellers reported about very low sales rates. However, in most cases the selling prices remained unchanged. In the Southern District some traders decreased the prices for extruded soybeans in mid-February, to attract more buyers. The offer prices in the reporting region varied within 30`000-32`000 RUR/t EXW.
Prospects
As for short-term prospects in the market segment of soybeans, many market operators agree that the supply/demand prices will remain stable until late May, while they do not rule out possible growth of prices, due to USD/RUR exchange rates fluctuations. The number of market offers is expected to be sufficient. It is worth noting that some large-scale enterprises have a well-formed commodity base until the end of the current season.
At the same time, low demand for soybean by-products will continue developing.
In the soybean oil sector, the prices will further decline following the similar trend on the markets of sunflower and rapeseed oils.
Also, market operators of the segments of soybean meal/cake and extruded soybeans expect for low offer prices in the near-term prospect to increase the sales rates. Thus, many buyers noted the high cost of soy products, which reorientated many poultry and pig farms to work with cheaper sunflower meal and cake.
Anna Bulatova, APK-Inform Agency
