Flour production in Russia

Grain crops (Russian market)

Main article: Grain crops (Russian market)

Grain exports and imports in Russia

Main article: Grain exports and imports in Russia

Chronicle

2023: Flour production in Russia increased by 3.9% to 9.26 million tons

In 2023, the production of wheat and wheat-rye flour in Russia reached 9.26 million tons. This is 3.9% more compared to 2022, when the volume of output was estimated at 8.91 million tons. The driver of the industry is record shipments of flour abroad, as stated in the BusinesStat review, published on April 16, 2024.

The study considers the production of wheat flour of the second, first and highest grade, cereals, products of the Extra variety, wheat upholstery and wheat-rye flour. Among the leading market players named the firm "Agrocomplex" named after N.I. Tcheveva, "Makfa," "Saburovsky combine of bread products," "Association Soyuzpishcheprom," "Aleiskzernoproduct," "Makrop," "Leningrad combine of bread products named after S. M. Kirov," "Melkombinat," Agro-industrial association "Aurora" and others.

According to estimates, in 2019, 8.61 million tons of wheat and wheat-rye flour were produced in Russia. In 2020, a decline of 2.6% was recorded - to 8.38 million tons, and in 2021 there was a decrease of another 1% with a final result of 8.3 million tons. The fall is associated with weakening demand within the country against the background of popularization of the principles of proper nutrition, which exclude flour products from the daily diet. In addition, during the COVID-19 pandemic, sales in the segments of the hotel and restaurant business and industrial processing decreased.

In 2022, the decline was replaced by growth, which amounted to 7.4% - up to 8.91 million tons. In 2023, positive dynamics remained. The introduction of a high export duty on Russian grain in 2021 led to more active processing of wheat within the country and an increase in the export of wheat flour at competitive prices. The main importing countries of these products in 2023 were Afghanistan, Iraq, China, Azerbaijan, Georgia, Kazakhstan and Turkmenistan. In addition, supplies to North Korea rose.^[1]

2022

Increase in production of fish fodder flour by 39% to 158 thousand tons

The production of fish fodder flour in Russia in 2022 reached 158 thousand tons, which is 9.3% more than a year earlier. Compared to 2018, the market volume grew by 39%, analysts at BusinesStat calculated. Their study was published in late October 2023.

According to experts, the driver of the development of fish meal production in Russia is growing external demand. The share of exports in the production of fish feed flour is predominant and tends to grow: in 2018-2022. It increased from 61.9% to 76.8%.

The main importing countries of fish fodder flour from Russia are China and South Korea - countries with developed aquaculture, presenting a growing demand for feed for fish and other aquatic organisms. In 2022, these two countries accounted for 98.5% of total exports. Russian fish meal producers, which are concentrated mainly in the east of the country, often find it more profitable to sell finished products to China or South Korea in large quantities so as not to incur the cost of storing and transporting products to other regions of Russia. Over the five-year period, the supply of fish feed flour from Russia to China has grown 1.4 times, to South Korea - 2.2 times.

From the BusinesStat study, published at the end of October 2023, it also follows that in recent years, China's aquaculture has been reorienting itself from an extensive increase in volumes to the cultivation of valuable fish hatchery facilities that are sensitive to the quality of feed protein, in particular the presence of fish flour in the feed. Therefore, in the near future, the demand for feed fish flour in China will increase, which will lead to a further increase in the volume of its Russian exports. The increasing external demand for products will contribute to the growth of its production in Russia.^[2]

Growth in wheat and wheat-rye flour production by 5.3% to 8.74 million tons

The production of wheat and wheat-rye flour in Russia in 2022 reached 8.74 million tons, an increase of 5.3% compared to the previous year. Market growth resumed for the first time in several years. This is evidenced by the data released in May 2023 by the analytical agency BusinesStat.

According to the study, in 2022, the export of wheat and wheat-rye flour from Russia became a record in five years and exceeded the level of the previous year by 3.4 times, amounting to 616 thousand tons. The incentive to increase the supply of flour milling products abroad was the high export duty on Russian grain. It has become more profitable for importing countries to buy ready-made flour than wheat. The second important factor was a sharp drop in flour supplies from Ukraine, which opened up new sales markets for Russian exporters. Experts called the drought in Turkey as a third factor.

Against the background of a low wheat harvest in Turkey in 2022, supplies of Russian wheat and wheat-rye flour increased both to Turkey itself (from 0.9 to 77.4 thousand tons) and to Iraq, which is a large buyer of Turkish flour (from 15.3 to 159.8 thousand tons).

The increased demand in 2022 spurred investment activity in the milling industry, analysts said. Several large manufacturers announced the launch of new projects at once:

• Grain Ingredient has launched the production of vitamin wheat flour;
• Agroholding "Steppe" opened flour production in the Rostov region and announced plans to modernize existing production in order to increase flour production capacity;
• Progress Agro completed the design of the flour plant in 2022, which is scheduled to launch at the end of 2023;
• "Basis Plus" launched a flour mill in the Krasnodar Territory.^[3]

Notes