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What is the benefit of processing soybean in the Far East - EastRussia |

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Soy Takeaway

What is the benefit of soybean processing in the Far East?

Soymilk, meat, butter, protein in canned food firmly hold a place in the diet of a modern man. World production volumes of soybean grow from year to year. Russia is not behind this trend either. The number of sown areas under soybean in the country is increasing. In this process, the regions of the Russian Far East appear as leaders. Here, not only soybeans are grown, but they are also actively sold abroad. About how soybean turns into an important article of domestic exports and what benefits are its processing inside the country, found out EastRussia.

Soy Takeaway
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Annual herb soybean belongs to the family of legumes and in the development of human civilization has a very long history. Along with rice and corn, soybean has become one of the first plants that a man has learned to cultivate. Appearing in China, soybean fields quickly conquered the countries of the Far Eastern region. Europeans got acquainted with this plant at the end of the 17th century, when the German naturalist Engelbert Kempfer described it in his book. He also brought from his journey the Japanese word "soy sauce", which transformed, entered the European and including the Russian language, the familiar word for "soy".

In Russia, as in other European countries, soybeans were grown in the XIX century. The main region of its agricultural cultivation has always been the Far East. During the Soviet era, attempts to grow soybeans in other regions did not have much success and its crop areas were relatively modest. This position of soybean in domestic agriculture was maintained until the beginning of the 2000-ies.

"China's fast-growing economy has created a serious demand for soybeans," said Nikolai Lipatin, PhD in Economics. - This coincided with the stabilization of the economic situation in Russia. In addition, derivatives from soybeans are actively used in the food industry as various kinds of additives. The addition of these factors gave a powerful impetus to the development of soybean production in the country.

According to the research of candidate of economic sciences Viktoriya Kurennaya, China's share in 2016 accounted for 71 percentage of world soybean imports. The same year was the record year for soy exports from Russia. According to the expert-analytical center of agribusiness "AB-Center", it amounted to 430 thousand tons, while in 2014 year it did not reach 100 thousand tons. No less successful was 2015 year, then for export was sent slightly less than 400 thousand tons of soy.

Such a significant change in the market conjuncture attracted large business to the Far East. In 2017 year In an interview with EastRussia the general director of GC Rusagro Maxim Basov noted that the group of companies that entered the Far East in 2015 year is interested not only in the production of beans for export, but also in the processing of soybeans at its own capacities. At the beginning of 2018, the group "Commonwealth" announced about the intention to build a soybean processing plant and a sea terminal in the Primorye Territory for transshipment of its products.

The interest of domestic business in the production of soy is understandable - over the past years, China has consistently increased the export of this product, and the geographical location of the Far East reduces transportation costs when exporting soybeans to the Middle Kingdom. This situation allows Russian producers to set records. So, in May of this year, the Rosselkhoznadzor reported that from 1 July 2017 Russia exported to China 1 a million 231 thousand tons of agricultural products, which is the highest indicator for the entire post-Soviet history. At the same time, the share of soy is 846 thousand tons (in second place rapeseed - 108 thousand tons).

SOYA REGIONS

Among the regions that make up the Far Eastern Federal District, the key role in soybean production is occupied by the Amur Region. According to the regional Ministry of Agriculture, in 2017 this crop was planted 967 thousand hectares or 62 percent of the total arable land. Despite the low average yield (in 2017, it was 13,3 a centner per hectare, with 19,2 a centner per hectare in the Belgorod region), Amur residents show good gross fees. According to the Agency of the Far East for attracting investment and supporting exports, 40 percent of all soybeans grown in Russia falls to the Amur Region. This attracts large capital, ready to invest in the construction of processing facilities.

In 2017 the company "Amuragrocenter" (net profit in 2016 year - 411,98 million rubles) built and launched in Belogorsk a plant for deep processing of soy. The total amount of investment is 2,4 billion rubles. A special product of this production is a soy protein isolate, which previously was exclusively an imported commodity. According to the plant's director Vasily Galitsin, the region for construction was chosen precisely because of the large amount of raw materials.

All the soybean oil produced in the enterprise is exported to China, and the meal (concentrate for the production of feed) is sent for further processing to the enterprises of the Urals. By the beginning of 2019, the plant should reach its designed capacity - 240-270 thousand tons of products per year. Characterizing the launch of this project, the associate professor of the Department of Economic and Social Geography of Russia, Moscow State University. M.V. Lomonosov Alexander Danshin in an interview with EastRussia predicted, that its final result can be the formation of a soybean cluster for the entire Far Eastern region. In addition, Amuragrocenter has another soybean processing plant in Blagoveshchensk. It also produces soybean oil, meal and mixed fodder.

The emergence of such industries creates a market for small soybean producers. In the Amur region, these are mainly peasant farms. According to the information of the regional Ministry of Agriculture, they account for 38 percent of all sown areas of soybeans.



The second region of the Far Eastern Federal District, actively developing soybean production, is the Primorsky Territory. If in 2015 year soybeans were sown a little more than 200 thousand hectares, this year, according to the regional department of agriculture, they plan to occupy 250 thousand hectares. Just like in the Amur region in Primorye, soybean is the leader in the number of sown areas, and this, in turn, affects the gross harvest quite well. In 2017, Primorye collected 381 thousand tons of soybeans, increasing this figure by 34 percent compared to 2016 year.

However, for manufacturers this positive dynamics turned into a price collapse. According to the Department of Agriculture, in November 2017, it dropped to 15 rubles per kilogram. And if for big manufacturers, and they are in the province of 17 companies, this did not entail serious problems, then small farms had to be difficult. To avoid a similar situation this year, in May, with the assistance of the regional authorities, a minimum fixed price agreement was signed between agricultural producers and the largest soybean processor, OOO Primorskaya Soya (part of the Rusagro Group). At the moment, this is the only production in the region, capable of processing up to 150 thousand tons of soybeans a year.

The shortage of processing industries leads to an increase in exports. According to the Federal Customs Service, if in 2016, Primorsky Krai exported about 63 thousand tons, in 2017 this indicator increased to 94 thousand tons. The main consumer of seaside soybean is China.

WHY DO ITS SOI?

One of the factors that spurred the increase in soybean production is the world price for this product. According to the All-Russian Research Institute of Pancake Crops, world prices for soybeans from 2000 for 2013 year with some fluctuations showed steady growth. However, a significant increase in the production of soybeans by leading countries in this area, such as the US and Brazil, led to a certain drop in prices in 2013. The International Independent Institute of Agrarian Policy (MNIAP) noted that with 2013 for 2015 year, the price per tonne of soybean fell from 538 to 390 dollars and with some fluctuations remains at this level to this day. This situation is reflected in the domestic market. Thus, in a study conducted by the analytical company Alto Consulting Group, it is noted that with 2015 for 2018 year, average soybean prices fell from 21 147,4 rubles to 19 642,3 rubles per ton.

Significant influence on pricing is exerted not only by weather factors affecting yields, but also by the relationship between the US and China.

"The United States is the largest producer of soy, and China is its main consumer," says Nikolai Lipatin, PhD in Economics. - The aggravation of relations between these countries and the threat of a trade war is reflected, among other things, in the soybean market. However, China, given its dependence on US supplies, is not yet ready to aggravate relations in this area. Therefore, while the market remains fairly stable. However, it must be taken into account that China seeks to reduce import dependence by increasing its own soybean acreage and reorienting to shipments from other countries. In this sense, Russia has prospects for increasing its export potential, but given the climatic factors, it is unlikely that our country will be able to provide a significant share of Chinese soybean imports.

It is obvious that export of soy, as a product of low redistribution, is unlikely to produce a long-term positive effect on the economy of both the country and the producing regions.

"Exporters of unprocessed agricultural products are too dependent on world price fluctuations," said the senior lecturer of the Chita Agrarian Institute, Viktor Ivanov. - Developed agriculture at the present stage is primarily a complex, which includes both the production of the product and its deep processing. In this sense, soy is a very promising product. Due to the large content of useful substances, it allows using it both in the food industry and in livestock. It is only necessary to take into account that products of high redistribution should also be used inside the country. Because the same China is not in a hurry to buy Russian soybean meal. They rely on the development of their own processing industries and will therefore be happy to purchase soybeans, but not redistribution products.

In the Far East, "it is necessary to create industries that will consume soy products - livestock complexes and food processing plants," says the expert.

- Whatever one may say, it is here that the main regions of its growth are the Amur Region and Primorye Territory. In addition, agrotechnics should also be developed, because without this it is unlikely to achieve high protein content in the culture. Thus, soybean, as a very promising agricultural crop, can give impetus to the development of many areas of the economy. In my opinion, there is an understanding of this both in business and in the state, - sums up Viktor Ivanov.