Foreign seed producers have notified Russian customers of the suspension of acceptance of applications for the purchase of sunflower hybrids and the revision of prices. As the reason, restrictions on the import of seeds from Russia are indicated. Meanwhile, the Ministry of Agriculture says that it has not stopped working with international companies, and targeted restrictions apply to individual sites whose products are contaminated. Experts and market participants call the decision of foreign suppliers blackmail and are confident that this will not create complications for the upcoming sowing campaign. Details – in the material “Izvestia”.
sunflower cancer
A number of foreign seed companies (Syngenta, Bayer, Nuseed) sent letters to Russian customers about the suspension of sunflower hybrid contracting and the revision of commercial policies and pricing conditions. The letters are at the disposal of Izvestia. Their receipt was confirmed by several crop enterprises.
“From February 1, we are disbanding the created invoices for sunflower seeds, suspending shipments, creating new invoices, as well as processing all incoming applications for shipments of sunflower hybrid seeds. In addition, the suspension will affect the contracting of additional volumes of sunflower seeds on the distribution portal. The above measures apply to all categories of customers,” Anatoly Altukhov, Director of Seed Sales at Syngenta LLC, said in a letter. It explains that this is a response to “imposed restrictions on the import of hybrid sunflower seeds from a number of countries”, and changes will be made to the current commercial policy of the company. Bayer and Nuseed clients have also received similar messages.
Apparently, the letters refer to the Rosselkhoznadzor banning the supply of Syngenta Seeds from February 1. The agency has identified one of the most dangerous sunflower diseases – phomopsis (gray spot, or stem cancer), which can lead to a loss of up to 80% of the crop. Since November 21 last year, the federal service for the same reason has already banned the import of seeds from all sites and places of shipment of Syngenta Espana SA and Syngenta France SAS.
The Ministry of Agriculture told Izvestiya that Russia does not prevent the import of imported seeds if they meet all product safety requirements.
“At the same time, one of the most important tasks is to prevent the import of contaminated objects into our country, which can jeopardize the harvest of agricultural crops. Systematic activity in this direction allows minimizing the risks of the spread of plant diseases, avoiding production losses and ensuring the high quality of the products received, the department stressed.
The ministry assures that bans on the import of seeds into the territory of the Russian Federation are introduced only if there are substantial grounds and are not discriminatory in relation to individual companies. For example, in 2022 sunflower seed restrictions were imposed on five sites in France, only one of which is owned by Syngenta. In total, only three Syngenta sites out of fifteen in different countries were closed due to Phomopsis. Rosselkhoznadzor did not impose any restrictive measures on Bayer products.
The refusal of foreign companies from contracting, apparently, is due not to the actions of Russia, but to commercial considerations, the Ministry of Agriculture concludes.
Nothing personal, just business
According to Mark Gecht, co-founder of the Russian seed producer OOO Rusid, last year there was already a similar situation – in the spring, foreign counterparties renounced their contractual obligations to Russian farmers and dealers. Many agrarians then switched to domestic seeds, and those who did not dare, later purchased imported seeds twice as expensive.
Chairman of the Board of the National Seed Alliance Igor Lobach says that Russia is open to working with foreigners, but they must also comply with the requirements adopted in many countries of the world, for example, to create joint ventures, localize production in our country, transfer their materials to the genetic collection. Now, in his opinion, “there is a one-sided game” and this does not correspond to the interests of the country in the field of food security.
At the same time, both experts regard the suspension of contracting as an attempt to put pressure on the Russian authorities through farmers so that they abandon the idea of import quotas and provide a green corridor for seeds of foreign selection. Among the reasons may also be the desire to create an artificial hype and further raise the prices of their products.
On the other hand, Lobach admits that Western producers are simply looking for an excuse to leave our market. Unofficially, sources in the supplier companies themselves say that the governments of their countries are recommending to reduce work in Russia.
Eduard Zernin, chairman of the Union of Grain Exporters, calls the reaction of foreign companies to the decision of the Rosselkhoznadzor hypertrophied and inadequate. Synchronicity and coordination of sending letters, too, in his opinion, “raises questions.” But the departure of some seed suppliers has been talked about for a long time, so Russian farmers had time to prepare. Now it became clear who was going to the exit and was looking for a suitable excuse, Zernin says.
— The world market of seed suppliers is quite competitive. First, there are international companies present in Russia that have refused to participate in this story. They perfectly understand the prospects of our market and are ready to follow the rules of a civilized game. And secondly, there are good alternatives in friendly countries, the expert believes.
What will you sow
Even if Western seed suppliers decide to completely withdraw from Russia, there are no risks for the sowing campaign, the Ministry of Agriculture says. To date, the Russian market is already largely provided with the necessary stocks of hybrids and sunflower varieties.
“The sowing campaign of 2023 will be carried out in full and on the planned areas,” the ministry said.
According to Mark Hecht, the total volume of the sunflower hybrid market in Russia is about 38-40 thousand tons. Of these, foreign companies produced about 20 thousand tons inside the country, and up to 10 thousand tons – the remains of previous years. In the spring of 2022, 20% more seeds were imported, and the sunflower area increased by only 3%. Obviously, the farmers have stocked up for the future, Hecht argues. About 5,000 more tons are domestic hybrids, plus 5,000 tons are varieties of Russian selection. That is, even if we assume that three foreign companies simultaneously stop working in Russia, “we will go through the sowing season smoothly,” the expert predicts.
Igor Lobach says that the situation with sunflower seeds is not critical now: for the main producing regions (Chernozem region and the Southern Federal District), there will be enough of their own hybrids, which are in no way inferior in quality to Western ones and at the same time one and a half times cheaper. And for regions with difficult climatic conditions (the Volga region, the Urals, the left bank of the Volga), varieties are also suitable. Until recently, Russian firms were inferior to foreign firms in terms of service, but now agricultural support also includes seed processing and other services, Gecht says.
Domestic breeding science gets a unique chance to prove itself and show a result worthy of the investments invested in it by the state, Eduard Zernin believes. According to the doctrine of food security, self-sufficiency in seeds in our country should be at least 75%. Currently, the authorities are trying to find the best options for solving this problem in a short time. The Ministry of Agriculture intends to stimulate the use of domestic seeds both through support tools and through import quotas. The idea was put forward last summer, and in January 2023, the Minister of Agriculture Dmitry Patrushev reported that the department was already preparing specific proposals for the subcommittee on customs and tariff regulation.
The ministry also intends to change the criteria for evaluating the effectiveness of projects of the federal scientific and technical program for the development of agriculture (FSTP). In particular, kpi will be introduced for the share of varieties and hybrids created within its framework in the total volume of sowing of the respective crops. This will allow us to support only effective projects that are in demand among farmers. New FSTP participants will quickly be able to replace foreign seed companies in the Russian market, the Ministry of Agriculture expects.
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