Export duties on sunflower oil make sunflower cultivation unprofitable in Russia

Sunflower production in Russia faces problems due to the impact of export duties, which limit the profitability of this crop. According to expert, acting director of the Oil and Fat Union of Russia Mikhail Maltsev, a return to zero export duties on sunflower oil could support the dynamics and profitability of sunflower production. However, according to the specialist, it is not the zero duties themselves that are more important, but the level of margin of sunflower seed producers that they could support.

The slowdown in sunflower production growth compared to other crops, such as rapeseed and soybeans, has become apparent in recent years. Maltsev notes that the introduction of export duties on sunflower oil limits the profitability of this crop, which contributes to a decrease in its production rates. Flexible export duties on sunflower oil were introduced in Russia on September 1, 2021, and although their rate changed, the problem of low profitability remained.

Other experts, in particular RUSEED and the People’s Farmer Association, note that the profitability of sunflower cultivation in the 2023/24 season was at 40%, but in the current season an increase of more than 60% is expected due to an increase in the selling price. However, the high cost of production facilities and loans reduces the margin to below 50%, which calls into question the investment attractiveness of this crop in Russia.

Tags: Russia, sunflower oil, sunseed