Page 136 - RusRPTJul21

X5 Group has been actively developing its own logistics infrastructure, in order to complement its rapidly growing e-grocery business and to serve additional client needs, where the company had one of leading positions in 2020 (a 13% market share). X5 aims to achieve a 20% share in the e-grocery market in the medium term.
In our model, online sales reach 8% of the total by 2025F, accounting for RUB227bn, having increased at a CAGR of 62% in 2021-25F. In its updated strategy through 2023, the company has extended the number of products to clients, complementing its core food retail with new core ecosystem attributes. The latter include a media platform, FMCG marketplace and delivery aggregator, as well as payment and subscription services. The company’s target is for those digital services to represent 5% of revenues by 2023.
9.2.6 Agriculture corporate news
RusAgro has announced the completion of its sowing campaign, with the area flat y/y at 538,000ha. In terms of the crop, grain lost 16% y/y (205,000ha), oilseeds increased 21% y/y (227,000ha) and sugar beet was up 8% y/y (90,000 ha). The company has also rented 49,000ha in the Saratov region, which implies an 8% y/y increase in the company's land bank to 686,000ha.
The announced planting area brings a 7pp y/y higher share of oilseeds in rotation, at 42%, and a 7pp y/y decline in grains to 38%. We see the higher area of oilseeds as a reflection of the strong pricing environment for seeds and oil in the ongoing season, and the deferred introduction of export limitations in comparison to grain, which prolonged the favourable outlook for farmers.
The Ministry of Agriculture estimates the planting area under sunflower seeds adding 8% y/y for the upcoming season (starts in September) to 9.2mn ha, while soybeans are to see a 5% y/y increase in planting area (3mn ha).
The government imposed a floating export tariff for sunflower oil for the next season (from 1 September 2021 to 31 August 2022) that is to be calculated as 70% of the difference between the market export price and the base price of $1,000/t. We calculate the implied tariff is currently at $350/t ,or 23% of the export price.
The grain harvest is estimated at 129.5mnt (IKAR), implying a 3% y/y correction from 133.5mnt in the previous season (which almost matched the record high). The agency also estimates that export
136 RUSSIA Country Report July 2021 www.intellinews.com