Russia’s Oilseed Sector Faces Its Toughest Season in a Decade

Russia’s oilseed processing industry is bracing for what may be its most challenging season in the last ten years, according to Kirill Melnikov, Marketing Director at Blago Group. After years of steady export-driven growth, processors now face a liquidity crisis as high raw material costs, weak global demand, and hefty export duties make shipments unprofitable.

A January 2025 export surge, triggered by fears of rising export tariffs, depleted sunflower seed reserves and drove prices higher. As Dmitry Krasnov of REXOFT Consulting explains, with soaring input costs, many processors are now operating with minimal or negative margins. Some export-oriented plants have already scaled back or paused production.

Experts believe processing margins will remain under pressure throughout the season, with no major price relief in sight before the next harvest. Market recovery will hinge on global pricing, the strength of the ruble, and the size of the new crop. If high input prices persist, processors risk accumulating surplus stocks that could depress prices further.

Producers are hopeful that expanded acreage and a solid harvest in the autumn will help improve performance for the calendar year 2025. However, without a significant drop in raw material costs soon, a full recovery in processing activity remains unlikely.

Tags: Russia, sunflower oil, sunseed