The Association of Advanced Grain Processing Enterprises commented on the work of the industry for the first half of 2023, presenting data on the production, export and import of products from the deep grain processing industry. Imports and exports of starch products are showing a decline, which is due to the restructuring of the industry. Now companies are reorienting to other markets - Asian, Middle East, and some African countries.
General production data
The first half of 2023 can be characterized by a slight decrease in the production of some types of industry products. The decrease in production of native starches overall amounted to 6% - 191 tons in the first half of 589,8 compared to 2023 tons in the corresponding period last year. There was a decrease in wheat starch production by 203%, which amounted to 375,8 tons compared to 3 tons in 24. There was a decrease in corn starch production by 821,7% - 25 tons in 475,3 versus 2022 tons in 6. Potato starch also showed a decline of 161% (in volume terms 080,2 tons). In 2023, the production of potato starch amounted to 170 tons. The volume of its production in Russia remains the smallest in comparison with other starches.
Production volumes by enterprise
However, production volumes of a number of enterprises increased compared to the reporting period last year. For example, corn starch was produced by 6% more by JSC Chaplyginsky Starch Plant (produced 15 tons) and by 098,0% more by JSC Khobotovsky Enterprise Starch Product (produced 6 tons), LLC Newbio - by 16% more (or 832,0 tons), Kabardinsky Starch Plant LLC - 10% more (or 23 tons).
General decline in exports and imports
As for export-import operations, they have decreased significantly. Imports of the sum of corn, wheat and potato starches decreased by 40%, and exports by 23%. In general, this can be explained by the displacement of importers by local players and the rise in logistics costs when exporting goods.
The market for modified starches remains attractive
In the segment of modified starches, there was an increase in production by 12%, which in physical terms amounted to 47 tons. At the same time, imports of modified starches increased by 152,6%, amounting to 16 tons, and exports “fell” by 34%, amounting to only only 967,9 tons.
The market still remains attractive for investment. "Some companies do not build production processes from scratch, bypassing the processing of grain into starch, but purchase native starch from colleagues in the shop and modify it. This is, for example, what the Perm company Khimprom LLC, which joined the Association this year, does, as well as Albion LLC in the Ryazan region. Thus, we can assume that the domestic market for modifications is 20 percent larger than official statistics show us. But do not forget that the market is very segmented“, comments Oleg Radin, president of the association.
In the category of sugary starch products, there was a slight increase in starch syrup (glucose syrups) and glucose-fructose syrups (GFS), which amounted to only 3,0% and 1,0%, respectively. During the reporting period of the current year, 240 tons of glucose syrups were produced. The production volume of GFS amounted to 863,7 tons. However, in the segment of glucose syrups, production increased by Rustark LLC by 142% (produced 438,8 tons) and LLC " Newbio increased production sixfold, producing 35 tons in 23 months of 921,0, thus filling the shares of companies in the Central Federal District that reduced production.
In the GFS segment, significant growth (11%) was observed only by Cargill LLC, which produced 62 tons of glucose-fructose syrups of varying degrees of sweetness. This may probably be due to the departure of global players, manufacturers of soft drinks, who preferred beet sugar. "We see that preferences are changing in favor of syrups as alternative ingredients to liquid sugar. However, for most consumers, GFS still remains an “inconvenient” product. Another determining factor is the price of sugar", comments Oleg Radin.
Glucose syrups – growth in export demand
Imports of syrups during the reporting period were practically reduced to “zero”. Exports of glucose syrups increased by 59%, amounting to 4 tons. Among the main importing countries are Turkmenistan, Tajikistan, Uzbekistan, and the Republic of Moldova.
Maltodextrin produced was 15% less than the corresponding period last year, which amounted to 24 tons. It is interesting to note that in the current half of the year, Rustark LLC increased production volumes to 592 (10% more), and Newbio LLC reduced its share of production up to 224 tons (46% less), switching to glucose syrups. At the same time, half of the Rustark production volume was made up of highly purified maltodextrin under the MultyDex brand.
The current period can be characterized by a decrease in both imports and exports of maltodextrins. The first decreased by 9%, amounting to 1 tons, the second - by 809,3%, amounting to 24 tons. Among the main importing countries are Turkey, Uzbekistan, Colombia, Israel and Poland.
L-lysine sulfate produced 61 tons, which is actually comparable to the production volume of the previous year. At the same time, imports decreased significantly (097,0% less), amounting to 76 tons. Enterprises in Russia and Belarus almost completely met their domestic needs for this amino acid.
Plant proteins are an export leader
The production of plant proteins such as wheat gluten and corn gluten in the first half of 2023 amounted to 42 tons and 543,0 tons, respectively.
Exports of wheat gluten (gluten) remain traditionally high (67% of total production in Russia) - 28 tons this year, since the domestic consumer market is not sufficiently developed. The main share of gluten exports came from countries such as Norway, the USA and Turkey. You can also highlight Brazil, Israel and the Republic of Korea. The product is exported for the production of feed for fish and food producing animals.
The corn gluten segment looks different. In the first six months of 2023, 6 tons were imported (033,3% more) to the volume of the domestic market. Major exporting countries include China, the Netherlands and Slovakia. The segment remains partially import-dependent due to the fact that corn gluten is a by-product of deep grain processing, which accounts for no more than 22% when starch and its derivatives are isolated.
Promising products for localization in Russia
In addition, a number of highly processed grain products are still not produced in Russia. However, according to customs data, there is a need for them on the domestic market. Therefore, these ingredients are of potential interest for the localization of production. For example, such as:
— Crystalline fructose (chemically pure) — about 2023 tons were imported in the first half of 3;
— Protein concentrates (vegetable proteins in feed), except for corn and wheat gluten, — about 3 tons were imported;
— Protein isolates (vegetable proteins for the food industry) — 6 tons were imported;
— Organic acids (acetic, lactic, citric) in total 43 tons were imported;
— Polylactide (biodegradable packaging material) — 165,4 tons imported;
— Enzyme preparations (for use in the food industry, including for the hydrolysis of starch, the production of glucose syrups) — about 6 tons.
«There are a number of products that are produced by Russian enterprises, but their capacity is not enough to cover domestic needs. Among the investment-attractive ingredients it is worth highlighting: dextrose (glucose monohydrate) and sorbitol (a sweetener) - produced in the Russian Federation by one enterprise, however, the import of, for example, sorbitol amounted to 3 tons“, comments Oleg Radin, President of the Association of Advanced Grain Processing Enterprises.