China Steps in as Number of Russian Feed Additive Market Suppliers Declines

Source: Vladislav Vorotnikov for Feedinfo

In 2022, Russia imported 41 billion roubles ($543 million) worth of feed additives, slightly lower than 43.3 billion roubles ($573 million) in the previous year but close to the average level of the past five years, a study conducted by Russian consulting firm RNC Pharma indicated.

The number of exporting countries dropped from 43 in 2021 to 35 last year. In total, 217 companies supplied feed additives to the Russian market in 2022, 38 fewer than in the previous year, RNC Pharma said, underpinning that several Chinese companies tremendously ramped up supplies to the Russian market.

Some analysts believe that the Russian market has become largely dependent on feed additives imported from China in the past year.

"Currently, I consider the main problem [of the market] is the narrowing of the list of feed additive suppliers to Russia and the focus almost entirely on one country ­– China. It is important to immediately expand the pool of suppliers so that we have the opportunity to have a replacement in the event of force majeure," Lybov Savkina, commercial director of Russian think tank Feedlot said.

The Russian feed additives market adapted to Western sanctions, and it was not as painful as the industry had anticipated in the spring of 2022, she added.

"Our Eastern neighbours, like skillful strategists, waited for the right moment and stepped in with offers that suit the Russian regulator in terms of the quality-safety criteria and consumers in terms of price-quality ratio. The trend will definitely continue in 2023, as the strategic potential of the Russian market is huge," Sergey Mikhnyuk, executive director of the Russian National Feed Union, commented.

"It is impossible to fully adapt to sanctions; the rules of the game change while the game continues, completely ignoring the original humanitarian nature of our subject matter," Mikhnyuk said, adding that it is also difficult for market players to adapt since some Western companies are not acting consistently, and some have opted for what he describes as a "semi-exit from the market".