Every season, Belarus imports nearly 0.9-1 mln tonnes of meals of the major oilseed crops, including sunflower meal (nearly 63% of the general volumes). Soybean meal covers the remaining part of the imports, but demonstrates somewhat higher cost, which is the significant factor in formation of the consumer market.
Imports of oilseed meals: stable structure
Since the season-2010/11, the imported volumes of oilseed meals to Belarus did not significantly change, and even reached its peak in 2011/12 MY, when the general imported volumes of the major oilseed meals totaled nearly 1.04 mln tonnes, due to some reduction of rapeseed production in the country for two running seasons.
At the same time, the significant growth of the imports of oilseed crops and increasing of the domestic supply of raw materials provided the less material impact on the imported volumes of meals than on its exports.
So, for 5 months of the current season Belarus imported nearly 361 thsd tonnes of the reporting products, down 19% compared with the figures in September-January of the season-2017/18. However, the import structure of oilseed meals remained almost unchanged: sunflower meal covered 61% of the reporting volumes (63% in the same period last season), soybean meal — nearly 39% (37%), and rapeseed meal — less than 0.5%.
At the same time, for 5 months of the current MY the exports of oilseed meals increased in more than 5.5 times in terms of the growth of supply of raw materials, and totaled almost 162 thsd tonnes, which already became a new record for the reporting period for the whole contemporary history of the country. Taking into account the active shipment rates on foreign markets, it is conceivable that Belarus will exceed the record figures of the season-2017/18 (198 thsd tonnes).
To date, the market of sunflower meal is the most large-scale one compared with the segments of soybean and rapeseed meals. At the same time, for several recent seasons the share of imported sunflower meal totals more than 95%.
As in the case of soybean meal, the imported volumes of sunflower meal also somewhat reduced. We should note that the reporting trend can be observed for the second running season. Thus, for 5 months of the current season the import volumes totaled 220 thsd tonnes, down 21% compared with the same period last season. If in September-December period the indicator showed a downward trend each month, then in January 2019 Belarus reached the record of import volumes in the current MY — 61 thsd tonnes (up 2% compared with December 2018, and up 21% compared with January 2018).
The situation developed in terms of some perturbations on the export market of sunflower meal of Ukraine, which is the key supplier of the product to Belarus. In turn, Belarus is the key buyer of the Ukrainian product. For several running seasons, the country took its position among the major three countries-importers, and in 2017/18 MY it even became the leader in the list with the share of nearly 13%, in the general export structure of sunflower meal from Ukraine.
However, in the beginning of 2018/19 MY the situation somewhat changed, and China, which offered more favorable price levels, became the more priority destination for Ukrainian exporters. As a result, the supplies of the product on the terms of DAP-Belarus sharply dropped off. Belarusian buyers compensated the deficit with the growth of purchases of the Russian product, and as of January its share increased to 29%, against 15% in September. Generally, for 5 months of the current season the share of Russian sunflower meal increased to 23%, against 17% in the same period last MY.
The current situation affected the dynamics of the import prices of Belarus, as well as the prices of the domestic market. After the seasonal decline of the prices in August-October, by early April 2019 the prices lowered to nearly 225 USD/t DAP.
The imported soybean meal still dominated on the domestic market of Belarus, despite the significant increase in production capacities, in particular, the processing volumes of soybeans in the country. Thus, in 2017/18 MY the imported meal covered nearly 55% of the total supply of the product, which reached 550-600 thsd tonnes.
It should be noted that the reduction of imported volumes is one of the specific features of the soybean meal market in the season-2018/19. Thus, in September-January of the current MY the imported volumes decreased by 16% compared with the same period last season. At the same time, every month of the reporting period demonstrated the downward trend. The trend developed, due to the increased domestic production of soybean meal in the reporting period in almost 2 times, taking into account the growth of soybean imports by 74% for 5 months of the current MY.
In addition, since the beginning of the season-2018/19 Belarus significantly reduced the imports of soybean meal from Argentina — to 68% for 5 months of the current MY, against 76% in the same period last MY.
As of January 2019, the share of Argentinian soybean meal on the Belarusian domestic market decreased to 37%, against 89% in the beginning of the season.
At the same time, in 2017/18 MY Russia covered 12% of the market of Belarus, but in the first half of the current season the country left the rating of countries-suppliers of the reporting product.
As a result, for the first 5 months Ukraine increased its share on the market of Belarus to 31% (24% in the same period last season, and 27% for the whole season). The price level is one of the major factors supporting the supplies of Ukrainian soybean meal. Since the beginning of the season, the prices of the Ukrainian product decreased to nearly 360 USD/t DAP.
Also, the growth of shipments on foreign markets is another important point for the soybean meal market in Belarus. For 5 months of the current season, Belarus exported 66 thsd tonnes of soybean meal (up 5 times compared with the same period last season). In particular, Russia purchased 87% of the reporting volumes (92% in the season-2017/18).
For two recent seasons, the constantly growing volumes of production and exports became the specific features of the market segment of rapeseed meal. Despite some reduction of rapeseed harvest in 2018/19 MY to 456 thsd tonnes (down 24%), the production of rapeseed meal may exceed 370 thsd tonnes (USDA estimations). First of all, the fact contributes to the record import rates of rapeseed — 188 thsd tonnes for the first 6 months of the current MY, up 75% compared with the imported volumes of the oilseed for the whole previous season.
Taking into account the relatively stable domestic consumption for several recent years — nearly 230-280 thsd tonnes, there is observed a significant growth of the export volumes in Belarus. In the first half of the season, the figures already broke the previous record of 2014/15 MY (87 thsd tonnes), and totaled 118 thsd tonnes. Each month of 2018/19 MY demonstrated some upward trends in the exports compared with the same period last season, while the October volumes were became the record ones for monthly shipments in the whole history of rapeseed meal supplies.
As for the export geography in the current season, it is worth noting the significant adjustments in comparison with the same period of 2017/18 MY.
In August-January, the United Kingdom (40%) was the key buyer of Belarusian rapeseed meal, which last season did not purchase the product from Belarus at all. Russia was the second major buyer, and almost doubled the purchases compared with the same period last MY, but reducing the share in the export structure to 11%.
In terms of the growth of production and exports in the current season, the segment of rapeseed meal demonstrated the upward price dynamics. The prices increased, due to the growth of prices on the market of rapeseed in the terms of reducing of the harvest and tightening of competition rates between processors.
While analyzing the situation and the main factors of the Belarusian segment of oilseed meals, APK-Inform analysts can specify several trends that will dominate on the market until the end of the season:
— despite the downward trend, the high dependence on imports of the key oilseed meals will continue developing;
— switching of Ukrainian exporters of sunflower meal to the Chinese market will reduce its share on the Belarusian market in favour of the Russian meal;
— high rates of soybean meal production in Belarus will contribute to the growth of exports of the product in the direction of Russia;
— taking into account the import rates of rapeseed, the production of rapeseed meal will remain rather high;
— the export rates of both soybean and rapeseed meals will depend on the planned needs of the key largest companies-processors of Belarus.
Svetlana Kirichok, APK-Inform Agency