Russian Sunseed Exports To Drop
Tuesday, January 23, 2001
Russian sunseed exports may decline sharply in March as a result of export duty doubling, while shipments in January and February are likely to remain quite intensive as the increase will not become effective instantly. The decision adopted by a government commission on protective measures in foreign trade on January 22 to double export duty on oilseeds to 20 percent from 10 percent seems to make sunseed exports inefficient. But it will only become effective a month after a government resolution setting the new duty is officially published.
The resolution is to be published in the government gazette next week. Therefore the new 20-percent export duty will become effective only from early March. Export contracts concluded prior to the official publication of the resolution are likely to be exempt from the increased export duty. As a result, the bulk of sunseed exports in 2000/01 will be shipped in a shorter period of time (from October 2000 through February 2001). In 1999/00, sunseed exports peaked in spring, reaching the highest level of 140,900 tons in May. According to official estimates, Russia's 2000 sunseed production slightly declined to 3.911 million tons from 4.15 million tons in 1999. SovEcon forecast 2000 output at 3.9-4.05 million tons. Output in 2000 declined in most regions, excluding the Krasnodar Krai, the Rostov Oblast and Western Siberia. However, production in most areas was significantly higher than the 1996-2000 average.
It particularly concerns the Rostov Oblast, a major exporting region, which accounts for about 55 percent of Russia's total sunseed exports.
In contrast to the 1999/00 season (October-September), Russia's sunseed exports at the beginning of the current season was rather dynamic. In October, Russia's sunseed exports amounted to 98,700 tons, compared with 17,900 tons in October 1999. In November, exports nearly doubled and amounted to 174,500 tons against 98,900 tons in November 1999.
In December, dynamic sunseed exports are provisionally estimated at 160,000-180,000 tons.
Export increases reflected better world prices, while domestic prices were relatively low. However, dynamic exports combined with growing demand of domestic refineries have stimulated an increase in domestic sunseed prices.
By the end of January, they had increased to $140-$145 per ton FCA European Russia from $110-$120 per ton in early December. At the same time, world prices are leveling off due to easing of world vegetable oil prices. As a result, the efficiency of sunseed export operations has started to decline. - (Reuters)