Page 140 - RusRPTApr21

measure is to last from 1 April 2021 until 1 October 2021, for a total amount of RUB8bn.
Kommersant also writes that the government is working on potentially introducing a floating rate for export prices on sunflower oil, equal to 70% of the difference between the export price and $1,000/t. According to the Executive Director of the Oil and Fat Union, Mikhail Maltsev, leading Russian producers have agreed not to raise prices until August 2021, whilst the prices are to correct naturally after that date due to the start of the new season.
The wholesale and retail price caps for sunflower oil were set at RUB95/l and RUB110/l, respectively, from 17 December 2020 to 31 March 2021, as part of the measures to stabilise growing prices for commodities and food in Russia. In addition, the Ministry for Economic Development has proposed an export tariff of 15% on sunflower oil but not less than €135/t, which could still be introduced if the price self- regulation by industry participants is insufficient.
Export prices for sunflower oil were up 70% y/y to $1,150/t in September 2020 - March 2021, reflecting the favourable demand for vegetable oils globally, and the ongoing recovery from the bottom of the cycle reached in March 2020. Last season (ended in August), Russia exported 3.8mnt of sunflower oil, which accounted for 66% of domestic production and 5% of global exports for vegetable oils. The potential fixed tariff represents 11% of the current export price as of March 2021, while the floating rate would equal 25%, if any or both of the options is eventually applied.
In our coverage, Rusagro sees a 50% and 30% contribution to revenues and EBITDA from the vegetable oil business; it has been the company’s core segment since the acquisition of SolPro. The impact of the already existing price caps on commodities is estimated by Rusagro at RUB1.5bn (4.3% of our 2021F EBITDA forecast), and now the respective figure sees further downside risks. We await the final details as to how the pricing limitations are to be implemented in order to evaluate their eventual impact on Rusagro’s profitability.
140 RUSSIA Country Report April 2021 www.intellinews.com