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opportunities for domestic producers to increase their capacities.
Rusagro provides exposure to the Russian meat segment. The company is the third largest pork producer, with a 6% market share as of 2020. The segment accounted for 20% of the company's revenues and EBITDA last year, making it the third largest, behind vegetable oil and agriculture. We model pork output increasing 5% YoY to more than 320,000t in 2021F.
The government has allocated a RUB 9bn cost reimbursement subsidy for sugar and vegetable oil producers for 2021. The initiative is regionally based, with the Voronezh, Rostov and Krasnodar regions to account for 40% of the total amount. Rusagro has estimated a monthly loss of RUB 200mn (equivalent to 12% of our 2021F net profit forecast) if price caps and other limitations initiatives are implemented throughout 2021 (RUB 2.4bn in total). The stated amount implies only a partial reimbursement of the missed income, and the regional basis adds additional uncertainty. In terms of asset allocation, the company has its key vegetable oil facilities in the Samara, Saratov and Sverdlovsk regions, as well as the Primorye territory, while sugar plants are located in the Belgorod, Kursk, Orel and Tambov regions
Russia’s grain exports in the current agricultural year, which started on July 1, 2020 and will end on June 30, 2021, may reach 46.5mn tonnes, chairman of the board of the Russian Union of Grain Exporters Eduard Zernin said on April 11.
“This year’s export potential forecast amounted to 50mn tonnes. We will definitely fail to achieve the target due to exports restrictions, but the target of 46.5mn tonnes is realistic taking into account existing restrictions,” he said at roundtable talks organized by the Agriculture Ministry’s center for agricultural product exports Agroexport.
The current agricultural year is difficult because one the one hand, Russia harvested the second largest amount of grain in its history in 2020, while on the other hand, the government limited exports of grain by introducing an export quota and an export duty, he said.
Russia’s grain exports amounted to 41.7mn tonnes in the 2019–2020 agricultural year, including 33.2mn tonnes of grain. The Agriculture Ministry expects Russia’s grain exports to reach 45mn tonnes in the 2020–2021 agricultural year, including 35mn tonnes of wheat.
The US Department of Agriculture has raised its forecast for Russia’s wheat exports in the 2020–2021 agricultural year, lasting from July 1, 2020 through June 30, 2021, to 39.5mn tonnes from 39mn tonnes, as seen by PRIME in the authority’s report released late on April 9. The current export forecast means that in the 2020–2021 agricultural year, Russia can regain its
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