Russian food market in the first half of 2023: results

1. A slight reduction in sown areas

The total area of ​​sown agricultural crops in RUSSIA in 2023 decreased by 1.3% to 81,202.8 thousand hectares.

At the same time, the area under grain and leguminous crops increased by 1.1% (the area under millet, peas, buckwheat, rice, wheat and barley increased, while the area under sorghum, oats, triticale, grain corn and rye decreased).

The area under oilseed crops decreased by 6.0%. AB-Center notes that the reduction in the area affected sunflower, rapeseed, oil flax, and camelina. At the same time, the area under mustard and soybeans increased.

The area of ​​sugar beet increased by 3.6%. As for potatoes, vegetables and melons of industrial cultivation, the area under potatoes increased slightly (by 1.6%), while under vegetables and melons decreased (by 3.5% and 6.8%, respectively).

2. Increase in production of most types of food and processing industry products, including:

A. Resumption of growth in MEAT production volumes.  Let us recall that 2021 saw stagnation in production. Compared to 2020, it increased by only 1.1%. In 2022, compared to 2021, the production of all types of meat in the country in slaughter weight increased by 3.5%. In the first half of 2023, production volumes increased by another 2.7%, compared to the first half of 2022.

B. An increase in the production of MILK and most of the main types of dairy products.  Raw milk production increased by 2.1% in 2022, including processed milk - by 3.0%. The production of dry milk increased by 19.9%, butter - by 14.6%, cheese - by 8.6%, fresh cream - by 6.0%.

In January-June 2023, compared to the same period in 2022, according to AB-Center calculations, the production of raw milk increased by 3.2%, cheese production increased by 21.6%, fresh cream - by 18.1%, dry milk - by 13.6%, dry whey - by 10.8%, butter - by 6.4%, condensed milk and cream - by 6.0%, fermented milk products (sour cream ,yogurt , kefir and others) - by 3.0%. At the same time, the production of cheese products decreased - by 9.6%, cottage cheese - by 5.5% and milk (except raw) - by 1.6%.

B. Some expansion of egg production.  In 2022, compared to 2021, egg production in Russia increased by 2.6%. In January-June 2023, compared to the same period in 2022, volumes increased by another 2.5%.

G. Increase in the production of vegetable oils, oil cakes and oilseed meals.  The production of vegetable oils in 2022 increased by 20.3%, mainly due to sunflower (+18.4%) and rapeseed oils (+40.2%). Soybean oil production increased by 15.5%. The production of oil cakes and oilseed meals increased in volume by 17.9%.

In 2023, production growth continued. According to the results of January-June, the production of vegetable oils increased by 17.7%, including rapeseed oil - by 78.5%, sunflower - by 8.8%, soybean - by 24.5%. The production of cakes and meals increased by 21.6%.

D. A slight decrease in margarine production in 2022 and growth in 2023.  At the end of 2022, production decreased by 0.2%. In January-June 2023, compared to the same period in 2022, the figures increased by 1.1%.

E. A significant increase in output from the FLOUR and cereals industry in 2022 and its decrease in 2023.  The production of cereals of all types in 2022 increased by 10.7%, wheat flour - by 6.9%, pasta - by 7.2%. At the same time, the volumes of rye flour decreased - by 6.4%.

The growth in the production of cereals, flour and pasta is largely due to the overall strengthening of food prices in the first half of 2022. In this regard, the demand for relatively inexpensive products such as cereals, pasta and flour has grown significantly . The share of these products in the structure of Russian consumption has increased significantly.

According to the results of January-June 2023, the production of cereals decreased by 3.4%, wheat flour - by 1.3%, pasta - by 7.4%. The production of rye flour increased slightly - by 0.4%.

3. A noticeable increase in the EXPORT of agricultural raw materials and food from Russia

According to the Federal Customs Service of the Russian Federation, total exports of agricultural raw materials and food of all types to all countries of the world in 2022 reached usd 41.3 billion , which, according to AB-Center calculations, exceeds the values ​​of a year ago by 14.8% (USD 5.3 billion). The growth of exports in value terms in 2022 was largely due to the record high level of food prices in recent years.

4. Multidirectional dynamics of export deliveries depending on the specific product group

With regard to exports, the study focuses on the analysis of data on the following commodity groups: grain (cereals and legumes), oilseeds, vegetable oils, oil cakes and meals, SUGAR and products obtained during its production (molasses, cake), meat and meat products,fish and seafood. The dynamics of flour exports by type are presented. The material is supplemented with an analysis of milk and dairy product exports.

Trends for 2022.  In 2022, according to AB-Center estimates, compared to 2021, among key food products, the volumes of exports of oilseeds, vegetable oils, fish and seafood, and wheat flour increased.

On the contrary, supplies of grain, meat and meat by-products, sugar, oil cakes and meals, milk and dairy products decreased in volume.

In terms of meat, despite the overall reduction in supply volumes by 18.9%, there has been an increase in the export of chicken meat - by 1.5%, and turkey meat - by 10.9%. The overall reduction in volumes was facilitated by a drop in the supply of pork (by 51.2%) and pork by-products (by 62.3%).

In terms of exports in value terms, a reduction in supplies is observed for sugar and products obtained during its production (by 28.5%), fish and seafood (by 14.2%), oil cakes and meals (by 3.9%), milk and dairy products (by 16.1%). An expansion of supplies is observed for other key commodity groups. This is due to significantly increased food prices in 2022, compared to the values ​​of a year ago.

Trends for the first half of 2023.  In January-June 2023, compared to January-June 2022, according to AB-Center estimates, there was an increase in exports in volume and value of grain, meat and meat products, vegetable oils and sugar. At the same time, supplies of milk and dairy products decreased. Supplies of flour, fish and seafood, oilcakes and meals of oilseeds increased in volume, but decreased in value.

5. Growth of import supplies in value terms

According to the Federal Customs Service of the Russian Federation, the total import of agricultural raw materials and food of all types from all countries of the world in 2022 amounted to USD 35.7 billion, which is 4.9% (USD 1.7 billion) more than in 2021.

6. Multidirectional dynamics of imports depending on the product or product group

With regard to imports, the study focuses on the analysis of data on the following product groups: fruits , vegetables, fish and seafood, meat and meat products, vegetable oils (primarily palm oil), and cocoa raw materials. The dynamics of imports of soybeans and soybean meal are also considered. The material is supplemented by an analysis of supplies of milk and dairy products.

Trends for 2022.  In 2022, compared to 2021, according to AB-Center estimates, there was a decrease in deliveries (in volume) of fruits and vegetables to Russia - if we talk about the total volumes for these product groups. When considering individual types of vegetables and fruits - for some of them, there was an expansion of deliveries. In value terms, the import of fruits, potatoes and vegetables increased slightly.

The volumes of imports of such commodity groups as fish and seafood, meat and meat products, raw cocoa, milk and dairy products decreased.

Regarding vegetable oils, a reduction in the volume of imports of palm (by 13.7%) and olive (by 11.6%) oils is noted. At the same time, supplies of palm kernel (by 0.6%) and coconut oils (by 6.6%) increased.

In value terms, supplies of all types of oils, with the exception of OLIVE OIL, have increased. Thus, the cost of importing palm oil to Russia, despite a reduction in volumes, in the context of rising prices, has increased by 11.3%.

Sugar supplies to the Russian Federation have increased significantly. This was mainly due to increased imports from Brazil. Overall, in 2022, compared to 2021, sugar supplies to Russia (in volume) increased by 4.2 times.

The volume of soybean meal imports to Russia at the end of 2022, compared to 2021, decreased by 19.1%.

Trends for the first half of 2023.  In January-June 2023, compared to the same period in 2022, according to AB-Center estimates, there was an increase in the volume of imports of fruits (as a commodity group in general, for certain types, imports decreased), palm kernel and olive oils, fish and seafood, and raw cocoa.

A decrease in supplies was observed in the import of potatoes and vegetables (as a commodity group in general, while if we consider vegetables by type, then supplies of tomatoes, cucumbers, onions, sweet peppers and zucchini increased), soybeans, soybean meal, palm oil, coconut oil, meat and meat products, sugar, milk and dairy products.

In value terms, imports of fruits, olive oil, fish and seafood, and raw cocoa increased. At the same time, the cost of deliveries of potatoes and vegetables, soybeans, soybean meal, palm oil, palm kernel oil, coconut oil, meat and meat products, sugar, and dairy products decreased.

7. Weakening food prices in the second half of 2022 and their mixed dynamics in 2023

Let us recall that the first half of 2022 was characterized by a noticeable increase in food prices. In the second half of the year, in general, prices fell. In the first half of 2023, prices for individual products began to strengthen. Let us briefly consider the dynamics in the wholesale and retail links.