In the upcoming season of 2024/25, oilseed production, according to optimistic forecasts, may set a record again. This was announced by Dmitry Rylko, the director general of the Institute for Agricultural Market Studies (IKAR), during the annual meeting of the National Union of Pig Breeders.
According to IKAR, it is expected that oilseed production in the 2024/25 season will range from 29.7 to 31.1 million tons. Sunflower is projected to account for 16.1-16.7 million tons, soybeans for 7.4-7.7 million tons, rapeseed for 4.7-4.95 million tons, and flax for 1.15-1.25 million tons. Additionally, sunflower harvest in four new regions will reach 1.7 million tons.
Rylko noted that these forecasts are based on current assessments, and the future harvest will also depend on the weather, especially for soybeans. He also pointed out that this year saw record acreage planted with soybeans and rapeseed in Russia - over 4 million hectares and 2 million hectares respectively, compared to 3.5 million hectares and 1.6 million hectares last year. Sunflower acreage stands at 9.5 million hectares - approximately the same as in the previous record year.
Despite the constant increase in harvests, IKAR estimates that in the coming years an additional 3 million hectares of oilseed crops need to be sown to provide new processing capacities. This, in turn, will benefit livestock breeders as new plants will supply high-quality meal and strengthen the feed base.
In the current season, due to the expansion of rapeseed and soybean acreage, as well as the preservation of sunflower acreage, meal and oilcake production is expected to reach around 9.4 million tons, similar to last year. Overall, a record supply of meal and oilcake for the domestic market is expected this year.
Rylko also highlighted that the European Union has recently imposed prohibitive duties on Russian meal and grain. Previously, 62% of rapeseed meal was exported to the EU, and Russia held a 72% share in the European market. China, the second-largest consumer of Russian meal, pays $20-30 less per ton than the EU. Delivery to China is also more expensive than to the EU. Therefore, in the 2024/25 season, a relative decrease in meal prices on the domestic market is possible.
According to Rylko, the export price of wheat this year will be higher than in the last two seasons. At the same time, domestic grain prices are likely to rise to compete with exporters due to reduced harvest and diminishing reserves. According to IKAR's estimates, 128 million tons of grain will be harvested this year (compared to 144.9 million tons in 2023).
However, there are conflicting reports about the expected harvest - in some regions such as Krasnodar and Stavropol, yields may even exceed expectations, but high temperatures in central regions could affect the outcome.
Rylko also drew attention to the significant amount of carryover grain stocks, especially wheat, which by early April were close to record levels. However, by July, they will significantly decrease due to active exports and will be lower than last year. He noted that these stocks are not of the best quality.
In central regions, where the main livestock assets are concentrated, carryover stocks by early April were significantly lower than last year - slightly over 6 million tons compared to around 7 million tons.
In the past season, Russia became a leader in barley exports, shipping 8 million tons. A serious reduction is expected next year due to decreased sown areas - exports to external markets will amount to 3 million tons according to IKAR's estimates.
Nevertheless, the situation for crop producers is complicated by declining profitability. According to Rosstat, the profitability of grain production was 17% last year (the ratio of profit to cost price). This amounted to approximately $3.1 billion, similar to the amount in 2017. Rylko assessed the current situation in domestic crop production, especially in grain and wheat production, as challenging.
