Sunflower export duty could rise up to 20%

Russia plans to increase the export duty on sunflower up to 20%, but not less than 80 euros per ton, from the current 6.5%, but not less than 9.75 euros per ton. If a decision is made, it will be valid from February 1 to August 31, 2021. The corresponding draft resolution of the Ministry of Economic Development should be submitted before September 15 of this year, Interfax reports citing a source in the agricultural sector who is familiar with the minutes of a meeting of the subcommittee on customs and tariff and non-tariff regulation and protective measures in foreign trade in mid-May.

In addition, the subcommittee found it appropriate to extend from June 30 to August 31 the ban on the export of sunflower outside the EAEU. The Ministry of Economic Development was instructed to prepare and send materials to the EEC for further consideration.

Vice-President of the Russian Grain Union (RZS) Alexander Korbut wrote on his Facebook page that the introduction of the duty “will take 40-50 billion rubles out of the peasants’s pocket,” and the money will go to exporters of oil, prices for which are already rising on the world market reaching $ 750-760 / t. In his opinion, the restriction will especially hit small farms that grow more than a third of the total amount of sunflower. He also drew attention to the fact that Russian consumers need affordable oil prices, but when a third of the volumes are exported, domestic prices will also rise.

“In Argentina, when they decided to increase duties on soybeans from 30% to 33%, farmers warned unobtrusively – we will reduce crops,” Korbut recalled. According to him, now the Ministry of Agriculture has “outplayed” the farmers – sowing is almost complete. “Do they really think it will always be like this?” He asks. Earlier, industry analysts have repeatedly warned that in the event of excessive regulation of exports and further restrictions, agricultural producers will begin to change crop rotation, refusing to grow sunflower.

Experience on the example of Turkey shows that the introduction of restrictions on the export of sunflower, on the contrary, leads to an increase in demand for oil, and consequently, prices for it. As a result, sunflower prices rose, but did not fall, Executive Director of the Oil and Fat Union Mikhail Maltsev commented to Agroinvestor. “All claims that restrictions work against producers are populism,” he adds. Proof of this – thanks to the demand for oil, sunflower prices are at a historic maximum of 28 thousand rubles / ton. Thus, both processors and producers of raw materials benefited from the restrictions, Maltsev claims.

At the end of May, Korbut told Agroinvestor that a possible extension of the ban on the export of sunflower can be called absurd, since Kazakhstan, the initiator of the idea of ​​restrictions, rejected them due to inefficiency. “I hope that the government will nevertheless make a reasonable decision so as not to aggravate the situation for agricultural producers. Moreover, in the coming season we are waiting for another record sunflower crop, if nothing happens to the weather. And our carry-over stocks are quite high to provide everyone, ”he said.

Back in mid-December 2019, the Oil and Fat Union proposed increasing the export duty on sunflower seeds from 6.5% to 20% in order to restrain the export of raw materials and stake on shipments of processed products abroad. At the beginning of February, at the conference of the Institute for Agricultural Market Studies (IKAR) “Where is the Margin”, Mikhail Maltsev said that regulatory measures in the oilseed market, and especially with regard to sunflower, can be introduced already from the second quarter of 2020 or even from March.

Restrictions began to apply in mid-April: the EAEU banned the export of sunflower outside the borders of the union. Then Maltsev noted that he considered the restriction timely. “The measure taken will stabilize the price of sunflower, so that we can ship sunflower oil without loss,” he commented to Agroinvestor.

True, contrary to the expectations of the Oil and Fat Union, prices for oil and sunflower increased as a result, including due to increased demand from Turkey, which turned out to be without the oilseeds stocks that it was counting on, but with great obligations to export refined deodorized oil, so the country had to purchase additional volumes of crude oil.

Despite the current export restriction, sunflower prices are still increasing. According to the “Center for Agricultural Analytics” of the Ministry of Agriculture as of June 4, the average price was 21.9 thousand rubles / ton, which is 317 rubles. more than on May 28, and 3.2 thousand rubles. exceeds the figure in early June 2019. Center analysts believe that prices for sunflower and sunflower oil will receive support due to the low level of residues. By May 1, 2020, oilseed inventories in agricultural organizations (without small enterprises) decreased by 30.1% compared to the same date in 2019. Rising prices will also contribute to rising world prices for sunflower oil.