The Russian Agricultural Ministry has published the list of critically essential feed products, for which production will be eligible for state aid under a program set to take effect on January 1, 2027.
The list comprises 39 items, including key feed amino acids such as arginine, betaine, valine, isoleucine, methionine, threonine, and tryptophan, as well as their salts and compounds. In addition, the list includes 12 essential vitamins, including A, E, D, K, and the B group vitamins, as well as biotin.
However, the Russian Agricultural Ministry has not included lysine monohydrate and lysine sulfate into the scope of the new program.
Russian feed lysine consumption was approximately 200,000 tons in 2024, with nearly 70% of this demand met by local manufacturers, estimates Feedlot, a Moscow-based consultancy. Russia only manufactures lysine sulfate, fully relying on imports of lysine Hcl.
Excluding lysine from the list “makes sense” because combined local capacities are sufficient to meet the demand on the domestic market, Sergey Mikhnyuk, executive director of the Russian National Feed Union, commented.
“This list is logical but will most likely be expanded or changed in the future as the situation develops," Mikhnyuk said. "Now it is necessary to understand what further proposals the state will make to those initiating the localization of one or another group from this list."
Under the existing plan, the government aims to reimburse 20% of the capital costs associated with the construction and modernization of capacities for feed additive production from 2027, along with providing state support measures in other forms.
Market players expect the state support to be further expanded, especially in the feed vitamins segment, where consumption on the Russian market is believed to be insufficient to justify investments in new capacities.
Mikhnyuk stated that investors will carefully examine the financial feasibility of producing other feed additives in Russia.
"If the break-even production volume is several times greater than the potential consumption [on the domestic market], then most likely such a project will be of little investment appeal," Mikhnyuk stated.
State support is crucial, as no import replacement on the Russian feed additive market will happen without it, commented Lybov Savkina, director of the Savkina Expert Group, a Moscow-based consultancy.
The existing measures laid the foundation for the import-replacement initiative, but they have yet to solve the critical problem of long-term funding, Savkina added.
"Most biotech projects require a payback period of 8-15 years, which is beyond the reach of standard bank loans. So, it's necessary to create long-term financing mechanisms—loans with terms of 15-20 years—instruments that allow investors to reduce risks and participate in large-scale projects. This approach is only just emerging in Russia," Savkina said.
"Going forward, long-term financing will determine the sector's scalability," Savkina added.