Russian Food Market - Trends and Forecasts (July 2021 edition)

The Russian market of agricultural raw materials and food is characterized by:

- Relatively stable total areas in 2021 and their multidirectional change depending on the specific crop. The area under all crops, according to preliminary data from Rosstat, in 2021 amounted to 79,911.8 thousand hectares, which is almost at the level of values ​​for 2020.

At the same time, the area under grain and leguminous crops decreased by 1.8%, under oilseeds - increased by 14.4%, SUGAR beet - increased by 8.6%. The total area under other crops (including potatoes, vegetables, gourds, forage crops) decreased by 7.8%.

If we consider the dynamics not by groups of crops, but by specific crops, then the largest increase in area in percentage terms is noted for rapeseed, sunflower, curly flax (oilseed flax), buckwheat, peas, and sugar beets. The area under rye, soybeans, melons has also expanded.

To a greater extent, the area under millet, fiber flax, open ground vegetables has decreased. Also, the change in areas in the direction of their reduction affected rice, potatoes, barley, oats and wheat.

- Expected changes in crop yields by species. Based on the area dynamics, AB-Center expects a number of changes in the market. Among them:

A. Growth in oilseed harvests. Accordingly, in the 2021/2022 season, the volume of production of oils, meals, and other oilseed by-products will also increase.

B. Increasing the harvest of buckwheat and the production of buckwheat, which will lead to the stabilization of prices for this product.

B. Reducing the collection of millet. Accordingly, the production of millet (millet groats) will also decrease. Prices for millet, as expected in AB-Center, will repeat the trends of two years ago 

- Some reduction in MEAT production and its expected recovery. The total volume of meat production of all types in slaughter weight in January-June 2021 amounted to 5,144.8 thousand tons, which is 0.4% less than in the same period in 2020. Thus, 2021 is the first year, since 2005, when there is a decrease in the total volume.

it is also important to note that the reduction in indicators occurred mainly due to the first quarter of the year, in the second quarter the volumes tended to recover. Given a slight decrease in prices for the components of the feed base (cereals, oilseeds, oil cakes and meals, etc.), stable demand in the domestic market and growing demand in world markets, it is possible not only to restore indicators to the values ​​of 2020, but also some of their growth.

In general, the total volumes sank due to the reduction in the production of poultry meat. On the contrary, the production of beef, pork, and lamb increased in the first half of 2021.

- Expansion of EXPORT deliveries of agricultural raw materials and foodstuffs from RUSSIA. In January-May 2021, compared to the same period in 2020, the export of agricultural raw materials and food from the Russian Federation in value terms increased by 10.9% to 11,683.0 million usd.

- An increase in the share of agricultural raw materials and foodstuffs in the total value of Russian exports of all goods. In 2020, according to AB-Center, it reached 8.4%, in January-May 2021 it was also at high levels - it was 7.1%.

Based on the results of the entire 2021, the share will be noticeably higher, as the second half of the year accounts for more export shipments. So, for example, in 2020, 42.2% of all deliveries of agricultural raw materials and food accounted for the first half of the year, and 57.8% for the second half of the year. In 2019, the figures were also close to this: in the first half of the year - 43.2%, in the second - 56.8%.

- Multidirectional price conjuncture depending on the product and the time period, namely:

A. The weakening of grain prices in June-July 2021. In early August, prices for certain types of grain had a slight upward trend.

B. The high level of meat prices. Poultry meat prices peaked at the end of May. In June-July there is a price plateau. Prices for pork and beef, according to the Ministry of Agriculture of the Russian Federation, continue to grow. Peak values ​​are observed at the end of July.

B. Decrease in the price of raw MILK . At the same time, prices for a number of dairy products, such as butter, continue to strengthen as of the end of July.

D. Record prices in recent years for oilseeds and oils in June. In July, price trends follow the world trends (some weakening of prices for vegetable oils).

D. A decrease in the price of a chicken egg. Prices peaked in April.

E. Some strengthening of sugar prices.

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G. Seasonal weakening of prices for potatoes and vegetables. At the same time, for example, for potatoes, due to the relatively late planting, the harvesting campaign also runs with some delay. In this regard, prices, according to the monitoring of prices for potatoes from AB-Center, are currently (at the beginning of August) at much higher levels than a year ago.