Soybean meal is an important compound feed component used in poultry farming. It is high protein content of about 30% to 46% along with lysine and methionine, essential amino acids as well as the fact that it is rich in vitamins B and E and elements potassium and phosphorus that makes it a valuable component of balanced feed rations. However, since Rosselkhoznadzor banned the import of meal from hybrid genetically modified soybeans in 2017, it went up in price, a trend that negatively affects the cost of finished product including meat, and runs counter to the strategy of increasing exports, as it makes domestic products less competitive on foreign markets.
Production of Russian soybean meal gradually increases, and new manufacturers start up. Large industry-scale businesses, however, still can be counted on one hand. The overwhelming amount of this component is now produced from the imported soybeans, a fact that makes the Russian market dependent on the global environment. Not cut and dried, however. World prices for soybeans and meal made of them have dropped significantly this year that resulted from the growth of the global soybean stocks in the season 2018/19. According to FAS USDA forecast for this March, the production volume is 107.2 million tons versus 98.6 million tons in 2017/18 marketing year. At the end of February this year, the level of prices for soybean was $320 to $340 per ton while it was about $460 per ton a year earlier. Notorious trade war between the United States and China also has its impact on the market.
Last fall, the Russian Federal Cartel Office performed analyses of competition and cost situation in the domestic soybean meal market. The study performed by the authority demonstrated that the Russian market of the product is transregional in nature. Processing facilities are mainly concentrated in the European part of the country including Kaliningrad Region. However, it seems still impossible to cover their demand for raw materials with domestic soybean resources, despite the year-to-year bulk yield growth. About 40 % of the Russian soybean yield is grown within the Russian Far Eastern Federal District, and a significant part of the volume received there is exported as raw material. In the light of these factors and the restrictions imposed by Rosselkhoznadzor, the domestic soybean meal market remains dependent on the supply of raw materials for domestic production needs, which results in the rise of the prices of the finished product for Russian livestock consumers.
So far, soybean meal didn’t become cheaper in Russia despite price reduction in the global market. From the beginning of the year, in the central regions of the country (where the main consumers of the product are located) the prices remained as high as 35 thousand RUB per ton or above. Market experts do not rule out, however, that in the coming months the domestic soybean meal market will still come under influence of global trends and the product will become cheaper. Nevertheless, the decline will not be as significant as globally, and the prices for soybean meal may start rising again by early summer influenced by the seasonal reduction in the supply of raw materials for processing.
How will the market of soybean meal develop in the immediate future? What could be the optimal strategy for the poultry farmers and manufacturers to keep costs under control? Does this type of feed protein have any worthy alternatives? Is there a potential for making the domestic market less dependent on the external environment? All these topics will be discussed in detail during the forthcoming summit “Russia’s Agrarian Policy: Today and Future”, Part 2 which will be held as part of the international exhibition for innovative technologies and advanced development under the concept “from feed to food”, the “Meat and Poultry Industry Russia 2019” (Moscow, Crocus Expo, May 28–30, 2019).
The host of the event is Asti Group, the company having 18 years of experience in exhibition promoting activities and partnering with the largest Western exhibition venues, including the Dutch VIV partnership dating back years. Asti Group has international expertise in the agro-industrial sector which empowers the company to effectively translate the industry-specific processes from the language of global trends into projects and solutions that are transparent for businesses.
“It is the overexposure of the Russian soybean meal market to the external environment that impairs the competitive ability of the domestic meat products. We can, of cause, give up on this product in the compound feed by replacing it with the cheaper sunflower meal but this will affect the quality of meat. If Russia is looking forward to the competition with foreign suppliers of poultry products in foreign markets, the problem of high soybean meal pricing must be addressed”, says Nariner Bagmanyan, Head of Asti Group.
The Summit participants will also be welcomed to discuss the surrent situation and trends in the development of the animal- and plant-derived protein production in Russia, to get acquainted with the global market forecasts in terms of projected growth, to learn about investment and innovative projects related to industrial-scale biotechnologies for protein production and recovery.
The participants of the event include such major players in the feed industry market as Rettenmeier Rus, a member of JRS Group. The company offers high-quality CF concentrates with increased fiber content, demonstrating the improved performance characteristics and efficiency. BIOMIN, a company specializing in animal feeding technologies, develops and produces supplementary feeds and premixtures as well as renders services in support of animal health and profitability of the livestock business. Another company is Kemin Industries, a recognized leader in animal and poultry feeding, who develops and offers to its clients the programs for Animal Health, Efficient Nutrition, Feed Safety and Hygiene.