ted by COVIDdisrup

years up to a total of 300,000 tonnes.

This growth continues despite numerous calls from domestic sunflower oil and meal producers on the national government to introduce tariff and nontariff measures to prevent such high sales of these crops overseas.

Finally, the government is also planning to further tighten sanitary regulations for vegetable oils and fats in the domestic market. In 2018, Russia reduced the maximum content of trans fatty acids in oils and fats products from 20% to 2% and a further reduction is planned this year.

Processors expand overseas

Many processors have recently announced plans to enter new markets and significantly expand the geographic spread of their supplies.

For example EFKO, one of Russia’s largest oils and fats producers, has almost tripled exports of its vegetable oils to foreign markets since 2016. The company is planning a further increase in exports and, with this in mind, has recently completed the expansion of trans-shipment capacities at its Taman terminal in the Black Sea, where most of its exported oil has traditionally been handled.

The current main overseas markets for Russian vegetable oils processors include Egypt, Iran and Turkey. In the last two years, supplies to these countries have increased by an average of 25% and it is possible the same growth rates will continue in the next few years.

This increase in exports was also due to the expansion of the trans-shipment capacities at some major Russian sea ports in the Azov and Black Seas, primarily those which specialise in the handling of domestic agricultural products and commodities.

In addition to this increase in exports to the Middle East, processors also plan to expand into the Asia Pacific region, where the demand for Russian vegetable oils has recently increased significantly.

Domestic production

Meanwhile, domestic production of oils totalled approximately 5.8M tonnes in 2019, according to preliminary estimates by analysts of the Russian Ministry of Agriculture.

At the same time, the volume of production in other countries in the Eurasian Economic Space, including some former Soviet states such as Belarus, Kazakhstan and Armenia, reached 750,000-800,000 tonnes.

According to statements by Dmitry

Patrushev, an official spokesman of the Russian Ministry of Agriculture, in addition to the territory’s traditional production of sunflower oil, the state is planning to create conditions to increase production of soyabean and other oils.

With regards to soyabean oil, these plans will primarily be implemented in the far eastern area of Russia, where the majority of soyabean is sown.

In the long-term, the Russian government has plans to stimulate the production of olive oil in the domestic market. Olive oil is not currently produced in Russia and must be imported.

The 2014-2015 Russian financial crisis, the result of a sharp devaluation in the ruble, led to a serious decline in olive oil sales in the country. However, in recent years, the situation has started to improve, while local demand for the product among customers is growing steadily.

According to state plans, the total investment necessary to implement these plans is estimated at RUB365bn (US$5.67bn) until 2024. The majority of these funds will be provided directly from farmers’ and processors’ own sources, with the remainder provided by the state and some state-owned banks in the form of loans.  Eugene Gerden is a freelance journalist