Counter-sanctions endanger soybean industry profitability and export opportunities

RUSSIA – The Russian government’s recent decision to revoke the duty-free quota for soybean seed imports in 2024 is sending shockwaves through the industry, jeopardizing profitability and export opportunities, warns Alexander Sanakin, president of the Russian Soybean Union.

The Russian Agricultural Ministry unveiled a draft decree on December 11, intending to eliminate the duty-free import quota on soybean seeds from “unfriendly countries” from January 23 to December 2024. Officials justify this move as a strategy to reduce the industry’s reliance on Western seeds.

Sanakin emphasizes that the Russian soybean industry’s seed requirements, estimated at 180,000 tons annually, largely depend on imported seeds. 

If the proposed restrictions are enforced, the market is expected to fall short of this volume, impacting the entire industry. 

This decision contradicts previous government plans to gradually decrease the share of imported seeds in the Russian soybean industry by 2030.

Sanakin remarks, “A step-by-step import reduction sounds like a reasonable strategy, while the immediate refusal [from import seeds] could harm the entire industry, sharply lowering the export potential of soybeans produced in Russia.”

One major challenge is the inability of domestic seeds to match the quality of their foreign counterparts, affecting not only soybeans but also other crops. 

The Russian Soybean Union notes that a significant portion of soybean seeds supplied to Russia come from NATO countries, with limited contributions from India. 

The president of the union, Sanakin, acknowledges that China produces high-quality seeds but has not shared them, and South American countries mainly supply GMO soybeans, with limited non-GMO seed options.

In response to the potential threat, the Russian Soybean Union is mobilizing resources to appeal to authorities and prevent the decree from taking effect. Sanakin highlights that an appeal has been submitted to the Russian presidential administration, outlining the severe consequences of the proposed restrictions.

These consequences include a decline in production volumes across the entire Russian agricultural industry due to an artificially created seed shortage, ultimately impacting business margins. 

With the absence of imported seeds, farmers may need to expand the sowing area to maintain output, leading to lower-quality agricultural products in Russia.

The industry calls for a reconsideration of the immediate revocation of duty-free quotas, emphasizing the importance of a phased approach to ensure the stability and growth of the Russian soybean sector.

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