Soy in Russia

Although once a widely grown crop, the fall of the Soviet Union, the economic uncertainty and the difficulties connected with privatisation (especially the decline in the livestock segments) all have had a serious negative effect on the soybean market. The bottom was reached in the late 1990’s when production volumes dropped below 300 thousand tonnes in Russia. Parallel to the stabilisation of market conditions, soybeans have been the most rapidly developing market of the key field crops in Russia over the past decade.

The growth is driven by regulatory, economic and structural factors, such as the easing of import rules around soy meal, increasing export (especially to China), changing prices for soy produce globally and changes in the animal feed market. All these factors have led to a soybean area increase as well as the intensification of production; in turn leading to constantly increasing yields and stable quality.

China’s increasing needs of soy meal due to significant growth in meat and milk consumption over the past two decades hasn’t been fully met with increasing soy production. Firstly, there are difficulties in allocating new areas for production and secondly corn (maize) is still much more profitable to grow in China. This is where Russia comes in. Russia is capable of delivering GM-free, ecologically clean, logistically (geographically) easily accessible soy for an affordable price with constantly increasing production quantities. Therefore, not surprisingly, exports to China are rapidly growing. Still, Russia only provides a minor share of Chinese soy import & it is ‘basically unnoticed’ compared to import from the US.

The soybean area in Russia has been through significant growth in recent years. In 2009 the planted area was 752 thousand ha, by 2015 it reached 2 million ha and grew by 8% in 2016. Although the total production volumes are lower than that of the largest grower in Europe-Ukraine-as of today, Russia is most likely to be the largest producer of pure non-GM soybean globally, producing 2.7 million tonnes in 2015.

The area in 2015 was distributed rather unevenly with the country with more than half located in the Far East and another 800 thousand ha’s in the European part; mainly in North Caucasia and Central Black Soil. We have to take into consideration that in the Far East, in regions bordering with China, growing soy has a longer tradition (550 thousand ha in 2009). However, in the European part of Russia soybean production grew almost out of nothing; in 2009 the soy area West of the Urals was less than 200 thousand ha, this increased by 300% within 6 years.

Crop protection market - missed opportunities, new opportunities

Due to increasing intensity of production, the growth of the soybean crop protection market was even more significant than the area growth, reaching 116 million USD by 2015. With this, the soybean CP market has become the 3rd largest segment of Russia behind cereals and sugar beet, but surpassing sunflower and remaining bigger than corn.

As mentioned, the value of the soybean crop protection market has been increasing rapidly over recent years. Although the net treatment rate (i.e. share of area where at least one crop protection product has been used) has been close to 100% throughout the last decade, the number of treatments and products (selective herbicides, fungicides, insecticides, additives and growth regulators) used per hectare has grown rapidly as indicated in the table below.

Herbicides are the biggest proportion of crop protection turnover in the soybean market – this is actually valid for all field crops in Russia. In 2015, herbicides represented 93% of the total crop protection turnover, with 5% for fungicides and 2% for insecticides. However, the market is getting more and more diverse with the importance of fungicide and insecticide treatments growing significantly: by 2015, 15% of the soybean area was treated with fungicides and 12% with insecticides. The crop protection market is still dominated by products from international producers. One company has over 50% turnover market share by itself, dominating in the herbicide and fungicide segments. However, last year showed a significant growth in the share of local companies, reaching close to 40% market share in turnover. This growth comes from the cumulative market growth of many small players.

Chart 1: Development of soybean cultivated area and 
CP market turnover 2009-2015

Chart 2: Share of international producers

  2009 2014 2015
Number of products per treated hectare (SDA /NET) 1,8 2,4 2,9
Number of treatments per treated hectare (TTA /NET) 1,3 1,7 2,2

Note: seed treatment and non-selective herbicides not included


                        Herbicides    Fungicides Insecticides
  2014 2015 2014 2015 2014 2015
Turnover (Mio USD) 84 102 (+21%) 3,2 5,5 (+71%) 2,1 2,5 (+17%)
NET treatment % 95% 94,4% 7,3% 14,8% 8,9% 12,4%


The herbicide market is dominated by products containing Bentazone, Imazamox or Imazethapyr. It follows therefore that to be successful in this market, it is vital to have such products in the portfolio. Currently there are few companies who manage to fulfill this expectation. In fact, several traditionally large players have difficulties penetrating this market due to the lack of these products, while some smaller generic players are capable of achieving good results with a few of the most popular active ingredients herbicides in their portfolio.

The herbicide market remains competitive at the moment with little space for technological intensification and a high penetration rate from the companies currently present. Although it seemed even in 2014 that there is no way to break the dominance of the top companies, smaller generics did manage to get a bigger bite of the pie in 2015. With the economic situation in the country becoming more stable by 2016, it is unlikely that smaller players will manage to win significantly more share, but the area growth provides space for all players to expand business.

The fungicide market saw a large growth last year. This was thanks to the wider use of a product containing Pyraclostrobin as well as the increased uses of products with different Azole combinations. It is also interesting that fungicides are primarily used in the Far East (80% of total fungicide turnover is here), while in the European part of Russia there is still room for development.

The regional situation with insecticides is the opposite. Although, despite seasonality differences the trend shows the market is smoothly growing. At the moment this growth primarily concerns the European part of Russia (mainly North Caucasus – over 50% of total insecticide turnover), which is by far not the key region for soybean.

The most widely used products are one active insecticides containing either Dimethoate, Lambda-cyhalathrin or Indoxacarb. Complex insecticides with more than one active ingredient make up less than 20% of the total insecticide market value. It is clear that the insecticide market still has a long way to develop to maturity, but the first steps have been taken. The Far East still shows huge potential for this market, given the perception of the potential problems caused by insects in soybean.

We also have to mention the inoculant market. This market also shows significant growth, surpassing 1.5 million USD in 2015. Given the fact that the interest of growers and activity of producers in this segment in Russia is growing quickly, as it is in the rest of the world, we can expect a boom in the near future.


Interest in soybean is constantly growing in Russia and there is no telling where the peak could be. The thing is that with the market potential constantly growing, more and more farmers are interested in the production of soy. This is happening even in regions where it’s not just lacking tradition but also where the conditions for growing this crop are not the optimal. As is often the case with such innovations this phenomenon may lose momentum over time as difficulties occur (e.g. weather-related yield loss, decrease of demand, produce price, etc.) and the soybean area will stabilize at a rational level – this is something we’ve seen on several occasions in the past, e.g. oilseed rape over the last decade.

However, soybean is likely to get another push from the Russian government considering the ban of animal feed product import from countries where GMO soybean is used in the production, including not only EU countries (where South American soy dominates in the feed) and Ukraine (where there is no guarantee for GM-free feed) – markets that already are under sanction in other agricultural sectors for political reasons, but also “friendly” markets such as China or South America. Should this threat be put to action, Russian soybean production will have to grow to fulfill the growing livestock market needs, no matter how irrational this may seem in case of Northern regions.

As for the crop protection market, growth and intensification is expected in the coming years as long as the profitability of the crop stays high. The biggest space for growth is on the fungicide market, but the insecticide and inoculant markets should also be within the line of sight of those interested.


András Márfi

Key Account Manager Russia

Kleffmann Group