The Association of value-added grain processing companies (Starch Union) presented the results of the industry for 2022. The added value grain processing industry continues to grow slowly but steadily. In 2022, the production of modified starches and maltodextrin has significantly increased — import substitution is taking place in these product categories. In 2022, due to the increase in logistics costs, the complication of financial transactions and the destabilization of supplies, both exports and imports of a number of products of the added value grain processing industry significantly decreased. Political departments have developed various mechanisms to support the industry — support measures are already in place and are being used by companies.
Last year, companies faced new challenges – creation of new supply chains of equipment, components, enzymes and reagents. Also, companies in the industry have tried to increase capacity, increase output, and replace some categories of imports. In general, the year 2022 has been completed with positive dynamics for the industry.
The Russian industry of added value grain processing make into about 2.5 million tons of grain and produces about 1 million tons of final products. This industry in Russia still remains in the status of a niche, but it has every chance to develop, launch new enterprises, production lines and enter new export markets. Several major projects are under development.
The industry of added value processing of grain is actively supported by the state. For example, starch producers are provided with investment loans for the creation or modernization of factories and preferential loans for the purchase of raw materials for processing. There is also a measure to reimburse logistics costs when exporting products, compensation for costs when companies participate in exhibition events and other support measures.
Taking into account the government support measures provided, in recent years the industry has shown a significant increase in the volume of products produced (Table 1) and constant decrease in dependence on imports of number of products with high added value (Table 2), expansion of the product line, as well as the possibility of entering new international markets (Table 2). 3).
The dynamics of the industry from year to year shows slow but stable growth. According to Rosstat (Russian statistic agency) and the Association's estimates, in 2022 the largest increase (by 39%) is observed in the production of modified starches, which is due to the need to replace imported analogues and the transition of consumers to domestic products — this year the output of various types of food modified starch amounted to 94,355 tons.
The production of the amino acid lysine, which is produced by two companies in Russia, increased by 22% over the year. In 2022, the output of domestic L-lysine sulfate amounted to 142,729 tons.
Other starch-based products showed an increase from 1% to 10% (Table 1).
Table.1 – Production of starch and derivatives, tons
|Native Starches||294 654||324 914||354 032||374 812||6|
|Dextrins||8 165||9 526||10 532||2 939||-72|
|Modified starches||58 804||61 103||68 006||94 355||39|
|High fructose syrups||152 504||200 625||260 002||278 190||7|
|Maltodextrin||19 131||20 073||49 773||54 960||10|
|Glucose syrups||466 648||467 235||476 940||494 103||1|
|L-lysine sulfate||80 000||90 000||117 000||142 729||22|
According to the Federal Customs Service, imports of starch and its derivatives have decreased this year for most major products. The exception was lysine in two forms (sulfate and monohydrochloride), the import of which increased by 37%, which was facilitated by the cancelling of import customs duties (Table 2).
The largest decrease in 2022 by 2021 occurred in the category of glucose syrups — 109 times. Maltodextrin imports decreased by 71%, dextrin imports decreased by 59%, modified starches by 46%, native starches were imported by 24% and high fructose syrups by 4%, respectively, less.
Table.2 – Import of starch and derivatives, tons
2021 , %
|Native Starches||22 363||24 574||40 225||32 341||-24|
|Dextrins||95 958||94 656||103 541||71 076||-46|
|Modified starches||422||257||5 467||5 261||-4|
|High fructose syrups||1 079||889||1 489||938||-59|
|Maltodextrin||14 625||10 038||5 740||3 359||-71|
|Glucose syrups||4 082||794||8 320||76||-10 847|
|L-lysine (sulfate and monohydrochloride)||60 834||53 352||43 130||68 783||37|
Exports of value-added products in 2022 also decreased significantly for the main products, due to market redistribution and replacement of demand in the domestic market.
The largest decrease in exports by 542% is observed in the export of lysine — 7,442 thousand in 2022. This is due to the ban on the export of lysine outside Russia, which lasted until the end of 2022.
In other categories, a significant decline in 2022 compared to 2021 occurred in high-fructose syrups, which were exported by 273% less — 394 tons. Glucose syrups is 226% less — 7,442 tons, modified starches are 61% less, maltodextrin is 8% less. Dextrin exports increased by 90% (Table 3).
The export market for the supply of products is very diverse. At the same time, the export of processed products is increasingly focused on the countries of the Middle East, Africa and South America. Glucose syrups in liquid form are exported to Turkmenistan, Uzbekistan. The major share of glucose syrups in dry form is exported to Lebanon, Jordan. Maltodextrin sales markets number more than 40 countries, including Ivory Coast, South Africa, UAE, Chile, Egypt, Colombia, Ghana, Turkey and the Dominican Republic.
Cationic modified starches go to Mongolia, Azerbaijan, Uzbekistan, Tajikistan. Modified starches used in the production of corrugated cardboard and in the oil and gas industry are exported to Iraq, Georgia, Uzbekistan, Turkey, Tajikistan, Turkmenistan.
Table.3 –Export of starch and derivatives, tons
|Native Starches||29 279||26 257||48 814||38 366||-27|
|Dextrins||7 151||7 484||8 142||5 072||-61|
|Modified starches||852||334||1 470||394||-273|
|High-fructose syrups||461||461||166||1 705||90|
|Maltodextrin||981||1235||13 536||12 577||-8|
|Glucose syrups||19 834||33 764||24 250||7 442||-226|
|L-lysine sulfate||1 652||736||616||96||-542|
Today, corn and wheat traditionally remain the main raw materials for the production of grain starch in Russia. Moreover, the corn starch segment occupies the largest share in the total volume of production.
Corn starch production increased compared to the previous year — 316,599 tons were produced in 2022. Imports amounted to 5,262 tons, and exports 36,277 tons. Corn starch is supplied to Colombia, Ivory Coast, Ecuador and other countries (Figure 1).
Diagram 1 — Corn starch, tons
In 2022, wheat starch production amounted to 53,922 tons, imports 775 tons, exports 1,488 tons (Figure 2). The main markets for wheat starch are Turkey and Serbia.
Diagram 2 — Wheat starch, tons
Potato starch production remained at the same level — 11,131 tons in 2022 against 11,483 tons in 2021. Imports of potato starch decreased slightly — which amounted to 10,500 tons in 2021 compared to 4 800 thousand tons in 2020. Exports decreased significantly — to 601 tons per year (Figure 3).
Diagram 3 — Potato starch, tons
"In 2022, our industry saw growth in many products, despite the fact that the year was difficult both for the market as a whole and for companies in our industry. Significant shocks include: an increase in the cost of logistics, the restructuring of settlement mechanisms, a decrease in interest in the export of a number of goods, as well as a decrease in investment attractiveness. However, the industry is reshaping, and companies are finding solutions with the active assistance of political departments. Backgrounds for the development of the market for value added grain processing industry remain, as there are still undeveloped niches – added value products, the import of which is up to 100%. I think that this year will be significant for the industry, and it will expand its contribution to all segments of Russian agribusiness,” comments Oleg Radin, President of the Association of Value Added Grain Processing Companies (Starch Union).