
The reason for such state is not only unfavorable weather conditions, but also information about the beginning systemic crisis in the beans industry. What is going on?
Bad predictions of production of ozimin in Russia
As reports the service world-grain.com for calculations by Moscow analysts ProZerno, as 38 proc. claims of winter is in bad condition. Generally it was found, that only 31 proc. is in good condition. In an analogous period of the year last it was estimated, that there were 74 proc. hence the concerns are justified. Based their calculations on data of the Hydrometeorological Center. And they add, that never before has been so bad.
– Russian officials attribute the current difficult situation of the grain industry to serious anomalies of weather, especially summer and autumn drought. In some regions of Russia from April to October it has not been raining, a situation that has not been occurring from old time. The drought was preceded by May frosts, which affected less three thirds of Russian agricultural
land and cost the country about 10 percent. yearly harvests. The challenges have beyond the weather – read on facts world-grain.com.
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The problem in the grain market in Russia
According to the Russian Grain Union (RGU), weather is only distracting attention from the problems of the grain sector, which they consider is undergoing a rapid technological decline.
Beginning with the same seed material, a lack of availability of good quality seed.
Service reported, that in January 2024 year the Russian government imposed a import quota on seeds from countries considered unfriendly. Although western seed is still available in the country, this has only affected the Russian branch.
– I visited different farms, looked at fields planted (with seeds) of foreign genetics and our native seeds -.said the RGU representative. I added, that: “with the naked eye you can see, that domestic crops are losing in terms of plots and productivity.” In addition to this he noted, that import quotas have come into the hands of only companies, which have never been involved in importing nations into the country.
– Such situation brings with its risk of manipulation of prices. In result in 2024 year. prices nasion of cereals in all Russia have hiked up. For an example, prices of grape have increased over the last 12 months by 32 perc. to 36 900 rubles (370 dollars) per ton in July 2024 year. – reported world-grain.com.
According to observers of the market, in last years the level of technology of Russian beans industry has steadily deteriorated. Particularly from year 2021 and it was saved by good weather conditions in years 2022 and 2023.
As reported, it appears that Russian farmers are holding back investments not only in new equipment, fearing the uncertain economic situation and costs of credit. Service has received data, from which shows, that in the first 10 months 2024 year sales of agricultural machinery in Russia declined by 16.5 percent. to 167.5 billion rubles (1.6 billion dollars). Such information was provided by Russian Association Manufacturers of Agricultural equipment Rospetsmash. Exports also have declined, shows that by 10 percent.
– Russian Ministry of Agriculture estimated, that the average profitability in the beans industry shaped at a consistently comfortable level of 17 proc, however farmers involved in producing cereals consider, that this number has nothing in common with reality, because in the last years they have experienced a significant decline in world-grain.com.
What interesting, from data RGU shows, that the average profitability of operations in the industry has declined to 4.9 percent in 2024 year. from 27.8 proc. in 2020 year, which produced wheat, which in 2020 year
generated record profitability at 32.5 proc, has proved to be lossy.
As stated, from 2025 year, Russian beans companies
will be subject to 25 proc. tax on legal persons in comparison with 20 proc. in previous years, because
the Russian government is attempting to help the federal budget. Expected are increases in production costs in all areas.
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