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MIL OSI Translation. Region: Russian Federation –

07.10.2020

Drought in Europe and the emergence of new feed drying complexes in the Russian Federation contributed to a sharp increase in the export of feed crops from Russia. In the first eight months, the supply of hay from the country increased 16 times – to almost 60 thousand tons, whereas a year earlier shipments did not exceed 7 thousand tons per year. Active export of fodder crops may exacerbate the problems of livestock breeders in the south of the Russian Federation, who, due to dry weather, are already facing a shortage of raw materials.

According to the results of January-August, the export of hay from Russia to non-CIS countries increased 16 times, up to 58 thousand tons year-on-year, according to the center of industry expertise of the Russian Agricultural Bank. By the end of this year, shipments may reach 65–70 thousand tons, which will be an absolute record for this product: in previous years, the volume of supplies did not exceed 7 thousand tons. According to a Kommersant source in the market, the cost of hay in foreign markets can be $ 300-400 per ton with delivery to the buyer. Thus, the current volume of Russian supplies can be estimated at $ 24 million.

According to Rosselkhozbank analysts, a third of all hay produced in Russia is concentrated in Tatarstan, Bashkiria, Altai, Dagestan and the Novosibirsk region. About 30% of the product is produced on farms. Forage crops are exported mainly from the Central Federal District. In particular, the Voronezh and Oryol regions accounted for 50% of supplies this year. The main consumers of Russian hay today are Latvia, which accounts for 80% of deliveries, and the Netherlands with 11%, according to the Rosselkhozbank.

According to Dmitry Rylko, Director General of the Institute for Agricultural Market Studies (IKAR), the sharp increase in hay exports from the Russian Federation may be associated with dry weather in Europe, which led to a shortage of feed. Artem Belov, General Director of the National Union of Milk Producers (Soyuzmoloko), notes that the world market of feed for cattle (cattle) itself is growing very dynamically and its turnover is estimated at several billion dollars a year. According to Rosselkhozbank estimates, over the past ten years, the volume of this world market has grown by 30%, to 10 million tons. But in Russia, modern complexes for the preparation of feed for cattle began to be created only recently, in particular in the Voronezh and Nizhny Novgorod regions, which may be associated with an increase in shipments, Mr. Belov notes.

Among such enterprises is the Fermeks company, created by the shareholders of a large producer of cereals, vegetables, etc. AFG National, which produces 26 thousand tons of artificially dried feed per year. Fermex confirmed that there is indeed a constantly growing demand for such feed on the world market. According to Artem Belov, for such industries, among other things, a relatively dry climate and a sufficient number of sunny days are required. But overall, it can be a pretty attractive business, he points out. So, according to Mr. Belov’s estimates, investments of 250-300 million rubles. in production of 20 thousand tons of feed per year can be recouped in four to five years.

The hay trade is a relatively small market, but Russia has the water resources necessary to increase supplies and sufficient areas of free land outside the south and the Central Black Earth Region, notes Sovecon director Andrei Sizov. According to him, the world’s largest buyers – the countries of the Persian Gulf, in particular Saudi Arabia, are even investing in the production of hay abroad for import to their own markets. As noted by Artem Belov, an additional impetus for Russian export of fodder crops can be provided by the opening of the Chinese market. Nevertheless, Mr. Sizov notes, in the medium and long term, Russia has a chance to become an exporter of dairy products and beef, which will be more profitable than simply exporting feed for animal husbandry.

Dmitry Rylko, for his part, recalls that this year many dairy farms in the south of the Russian Federation faced a lack of forage due to drought. Therefore, given the limited supply of corn, meal and alfalfa within the country in the second half of the year, one should expect an increase in competition for feed and an increase in prices for this raw material, he predicts.

A source:Kommersant

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EDITOR’S NOTE: This article is a translation. Apologies should the grammar and / or sentence structure not be perfect.

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