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. Last Updated: 07/27/2016

Record Oilseed Harvest to Be Reaped

Russian vegetable oil production has been one of the few sectors to survive the crisis which crippled the economy a year ago and forced the country to resort to foreign food aid, an agricultural expert said Wednesday.

Andrei Sizov of the SovEcon consultancy said that the impact of last year's crisis, which peaked with an effective devaluation of the ruble and debt default on Aug. 17, had been exacerbated by the worst grain harvest in decades.

Russian farmers only harvested 47.8 million tons of grain last year, compared with annual domestic consumption estimated at more than 70 million tons.

"So the country did not even have the resources to slow down a decline in animal husbandry," Sizov said.

He added that this year's grain harvest, forecast at around 60 million tons, was also inadequate and would leave the country short of 10 million tons of mainly feed grain.

However, Russian sunflower growers and sunseed oil producers were an exception to the broad picture, as they managed to effectively compensate for a fall in vegetable oil imports.

Russia's vegetable oil output, essentially sunseed oil, rose 18.7 percent in the first half of 1999 to 330,400 tons from 278,400 tons in the same period last year, SovEcon said.

Simultaneously, output of products based on vegetable oil - margarine and mayonnaise - rose, effectively substituting imports, Sizov said.

He said a new record in sunflower seed production was expected this year as 5.5 million hectares have been sown to sunflowers, up from last year's previous record area of 4.2 million hectares.

The crop may, therefore, reach 3.7 to 4.2 million tons, well up from three million tons last year, he said.

A 10 percent tariff set on sunseed exports this year is also expected to help draw producers to the local market. "We believe the market will be flooded with domestic vegetable oil and its value added products this year," Sizov said.

Elsewhere, the crisis continues to bite despite the clear advantage for domestic producers resulting from the ruble losing more than 70 percent of its value since last August.

Before the crisis, Russia imported up to a third of food consumed, although in major cities like Moscow and St. Petersburg the share was estimated at around 50 percent.

Even after the currency stabilized this year and imports began to rebound, volumes are still far from pre-crisis levels, with the impact cushioned only by a huge food aid package from the European Union and the United States.

SovEcon forecasts cattle numbers will fall by 8 percent by January 1, 2000, from the previous year's level, pigs by 1 percent, sheep and goats by 16 percent.

"It is clear that animal husbandry will continue decreasing in 2000 also," Sizov said. SovEcon data showed Russian meat production fell in 1998 to 4.6 million tons from 4.9 million tons in 1997 and was expected to fall further to 4.3 million tons in 1999.

There was an increase in egg production in 1998 to 32.5 million from 32.2 million in the previous year, but egg output this year is estimated to fall to 32.1 million as the poultry population had little chance to grow due to feed shortages.