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Both countries continue to develop soy production, doubling production levels over the past decade, according to data presented by the International Grains Council (IGC).
According to Arvin Donley in an article on the World-Grain.com portal, the reasons for the growth of soy production in Russia and Ukraine are the increasing demand for soy processing products in the local market, its relatively high profitability compared to other agricultural crops, and the beneficial nitrogen-fixing properties that play an important role in crop rotation.
It is worth noting that Russia and Ukraine still remain insignificant players in the global soy market, but analysts at IGC predict that in the 2024-2025 marketing year, Russia and Ukraine will collectively harvest 13.1 million tons of oilseeds, exceeding the previous year's figures by 10%. Yield improvements in these countries are quite modest and still significantly below the global average, so a large part of the yield increase is due to the expansion of planting areas.
Soy production in Russia, where the main driver of growth has been the increasing local demand for soy products from the feed and food sectors, is mainly concentrated in the eastern and central parts of the country. According to IGC data, soy production in Russia is expected to reach 7 million tons in 2024-2025, exceeding the previous year's results of 6.7 million tons. Russia is the largest soy producer in the CIS countries, but soy imports still play an important role in the demand-supply balance in the country: in recent years, import volumes have exceeded 1.5 million tons.
“Most shipments come from Brazil and Argentina, but in certain seasons, sources of supply include Paraguay,” IGC notes. “However, increasing supply to global markets will reduce net imports to 400,000 tons by 2024-2025.”
Russian soybean exports have sharply increased, reaching a peak of 1.3 million tons in 2022-2023 and averaging 1 million tons over the past five years, according to IGC data. Almost all soy shipments from Russia are destined for China.
Ukraine remains the largest soybean exporter among the CIS countries, with a 70% share of exports in this region over the past five years. IGC forecasts that Ukraine will export a record 3.7 million tons of soybeans by 2024-25.
“Ukrainian deliveries are usually driven by demand from EU processors, as well as deliveries to Asia, primarily in the Middle East (Turkey),” IGC notes. “While sales of Ukrainian soybeans to the CIS countries are declining, demand from African buyers is growing, and shipments to Egypt exceed 1 million tons in 2023-24 - the highest figure in history.”
According to IGC data, Ukraine ranks second after Russia in soybean production volume among the CIS countries and, according to forecasts, production will amount to 6.1 million tons in 2024-2025, exceeding the previous year's results by 18%.
“Initially, the domestic market of Ukraine was the main factor driving the expansion of soybean planting areas, but over the past decade, significant export growth has been observed,” IGC reports. “Due to the shift from grain crops, resulting in higher profitability, soybean planting areas have significantly increased by 2024-2025.”
Climatologists believe that climate change will have a positive impact on soy production in Russia, especially in eastern regions, as well as in some parts of Ukraine in the coming years, as rising temperatures will create new favorable conditions for soy cultivation and potentially increase yields.
Source: www.world-grain.com. Author: Arvin Donley.
