MOSCOW — The United States may double shipments of the oilseed to Russia after eliminating some trade barriers with the country.
The House of Representatives on Nov. 16 passed legislation that would allow President Obama to grant permanent normal trade relations with Russia. The U.S., the world's largest soybean exporter, won't be able to take full advantage of Russia's joining the World Trade Organization in August until the legislation is approved by the Senate and Obama.
"For nearly 80 days now, all of the other 155 members of the WTO have been able to fully access Russia's market liberalizations, but U.S. businesses cannot," Danny Murphy, first vice president of the American Soybean Association and a soybean farmer from Canton, Miss., said in an email Tuesday. "For nearly 80 days now, U.S. business has had no voice in the WTO's rule-based system to engage Russia regarding any of its policies that may be inconsistent with the obligations it has undertaken as a WTO member."
In the 2011-12 marketing year, the U.S. shipped 30,000 metric tons of soybeans and 25,000 tons of soybean meal to Russia, he said. The Senate may consider the legislation in the next week or two, and if passes, exports may double, he said.
As part of WTO, Russia agreed to eliminate its import duty on soymeal in 2014 from 5 percent, Tamara Pashchenko, deputy managing director of Russia's Oil and Fats Union in Moscow, said by phone yesterday. The Oil and Fats Union members account for 85 percent of vegetable oil production in Russia. There is no import duty on soybeans, she said.
"Russia's soybean market is expanding because of a growing consumption by livestock farms," Dmitry Rylko, general director of the Institute for Agricultural Market Studies, said by phone from St. Petersburg.
The country's pork production increased 53 percent over seven years to last year and poultry output more than doubled, according to the Moscow-based National Meat Association.
Russia is importing soybeans mostly from Brazil and Argentina, where prices are lower than in the U.S., Rylko said. Russia's soybean and soymeal production is increasing "aggressively" and will start competing with imports soon, he said. "Our U.S. colleagues may find it not so easy to penetrate the Russian market given these factors," he said.
Russia's soybean production will increase to 1.8 million tons this marketing year, more than double the 744,000 tons it was in 2008-09, according to U.S. Department of Agriculture estimates. Imports are expected to be 800,000 tons, 4.4 percent lower than five years ago, the USDA data show.
Soybean meal output is forecast to rise to about 2 million tons, or 69 percent more than in 2008-09, while imports drop 23 percent to 370,000 tons, the data show. U.S. soybean exports were 37.1 million tons in the 2011-12 season, making the country the largest shipper, according to the USDA. This year, Brazil will be the largest at 37.4 million tons, it said.