The Ministry of Economic Development proposes to extend duties on the export of sunflower, oil and meal. They will be valid until August 31, 2024

The Ministry of Economic Development proposed to extend the export duty on sunflower seeds, sunflower oil and meal until August 31, 2024. The draft of the relevant government decree is published on the portal of draft regulatory legal acts. It is also proposed to increase the base price for calculating the export customs duty on sunflower meal from 13,875 rubles. up to 15875 rubles. According to the explanatory note, the application of these export control measures was deemed appropriate at a meeting of the subcommittee on customs-tariff and non-tariff regulation, protective measures in foreign trade of the government commission on economic development and integration, which was held on July 21, 2023.

The sunflower export duty is 50%, but not less than $320 per ton. It was introduced on July 1, 2021 and was first valid until August 31, 2022, then was extended until August 31, 2023. In June, on the sidelines of the St. Petersburg International Economic Forum, Agriculture Minister Dmitry Patrushev said that the duty on sunflower exports would remain in place until processing capacities were fully loaded.

Analyst of the OleoScope agency Kirill Lozovoy told Agroinvestor that the sunflower export duty allows for a high load on domestic oil extraction enterprises. This measure has been operating on the market for more than a year, due to which it was possible to reduce the sale of oilseeds abroad and save most of the raw materials within the country.

Now the main buyers of this crop are the EAEU countries, the expert noted. For example, in the first half of 2023, Kazakhstan imported the most sunflower from Russia - 117 thousand tons (-9% compared to January-June 2022). In general, shipments of oilseeds in all directions over six months decreased by 11% to 146 thousand tons. According to Lozovoy, sunflower prices in Russia are now showing growth in certain macro-regions against the backdrop of a recovery in world prices for sunflower oil and meal after the suspension of the "grain deal ". Another global episode is the uncertainty with supplies from Ukraine.

There are also factors in the domestic market that lead to higher prices for seeds, continues Lozovoy. “For example, a delay in harvesting: some oil refineries are switching to purchasing sunflower as a temporary replacement for rapeseed, the harvesting rate of which is about 40,000 hectares behind last year,” he said. In addition, a number of MEZs, which are now contracting seeds, expect further, even more active growth in oil prices on the world market, so they are already purchasing for autumn processing in order to get into the most attractive price for raw materials, the expert noted. He also stressed that in August the duty on the export of sunflower oil will not put additional pressure on the purchase prices for sunflower seeds, since the export rate for the finished product will be zero for the third month in a row.

     The duty on the export of sunflower oil from Russia from August 1 will remain zero, the duty on the export of sunflower meal will increase from 6248.7 rubles. up to 7444 rubles. per ton, follows from the materials of the Ministry of Agriculture. The duty rate for oil is calculated at an indicative price of $829.4 per ton ($872.4 per ton in July), for meal — $270.2 per ton ($271.4 per ton).

Oilseed export duties are a consistent policy of the Ministry of Agriculture to protect the domestic processing market and to increase the utilization of domestic capacities, Mikhail Maltsev, executive director of the Oil and Fat Union, told Agroinvestor. According to him, the oil and fat industry has been seeking them for many years and will always support decisions to preserve and extend them.

“Including thanks to the retention of the sunflower export duty, sunflower oil production, according to our forecasts, will amount to more than 6.4 million tons by the end of the season, which is 10% higher than in the 2021/22 season,” Maltsev compares. However, according to him, the production potential was not fully realized. This is due to the curbing of sunflower sales by agricultural producers in the first half of the season, which led to uneven loading of processing capacities and a new record for sunflower seed carry-overs - more than 2 million tons.

It is important that the rules for the market are determined in advance, for the entire season, and are unchanged, he continues. This makes it easier for both producers and processors to form market strategies and avoid unexpected losses. “We hope that farmers will not continue the practice of curbing sunflower seeds sales at the beginning of the season, but will adhere to a reasonable trading strategy,” Maltsev added.

He expects stronger demand for vegetable oils and a recovery in global oil prices in general, especially against the backdrop of unfavorable forecasts for next season's oilseeds and palm oil production, which are associated with the El Niño natural phenomenon. The Union also expects the restoration of a fair premium for sunflower oil in relation to the base (palm and soybean) oils after the suspension of the "grain deal".