Russian soybeans are inferior in quality to American ones, so why are they actually more expensive?

Summary: What are the advantages of Russian soybeans, and why are they more expensive than American soybeans?

Regarding the cultivation situation of Russian soybeans, Science Xingnong has previously given an introduction: their quality and price, compared with soybeans from the United States, Brazil, Argentina and others, have no advantage at all. The reason is still that the cost of growing soybeans in Russia is high; the price of soybeans imported from Russia is basically on par with domestic soybeans in China, so China has never imported too many soybeans from Russia.

On the one hand, Russia's total soybean output is very low! According to statistics, Russia's total soybean output in 2017 was 3.6 million tons! Do you find that surprising? For a country with such a vast territory, its soybean output is actually only equivalent to one third of China's soybean output. Apart from meeting domestic demand, Russia also exports a small portion of its soybeans, and the vast majority of those are exported to China; last year China imported 500,000 tons of soybeans from Russia. In terms of volume, this small quantity of imports really is a drop in the bucket for China, and it seems rather feeble and pale when it comes to easing China's soybean supply difficulties.

Russian soybean cultivation is concentrated in the Far East region; in terms of geographical latitude, this is higher than Northeast China, the weather is relatively colder, and the growing conditions are relatively harsher. Although Russia is vast in area, its overall soybean planting area is not large; add to that the colder weather, and the climate is not very suitable for soybean cultivation, so both yield and quality are relatively poor compared with international soybeans. However, for Russian soybeans, the only advantage at present may be that they are non-GMO.

On the other hand, the price of Russian soybeans is relatively high. Looking at current international soybean prices, the landed price of soybeans from the three major soybean-producing countries, the United States, Argentina and Brazil, is basically maintained at 3,200 yuan per ton, which is still considerably lower than the price of domestically produced soybeans in China at 3,400-3,600 yuan per ton. Yet when we look at the price of Russian soybeans, it is basically maintained at 3,300-3,500 yuan per ton. Compared with China's domestic soybeans, there is basically no strong price advantage, and it can even be said that there is no price advantage at all.

When soybean processing enterprises purchase soybeans, it is probably safe to say that no company manager would give up good-quality, low-priced soybeans and stubbornly insist on importing Russian soybeans. After all, in an era dominated by profit, a price advantage also means a competitive advantage. Moreover, Russian soybeans cannot well meet China's soybean demand; for example, the main use of China's imported soybeans is oil extraction, yet in actual fact the oil yield of Russian soybeans is not high, at least relative to the three major soybean-exporting countries.

In summary, because Russia's production capacity is relatively limited, China naturally cannot import more soybeans from it; and because Russian soybeans have relatively low yields and high cultivation costs, it can also be said that Russia's soybean-growing environment is similar to China's, so in terms of price there is naturally no great advantage compared with Chinese soybeans. Although overall Russian soybeans are relatively cheaper than Chinese soybeans, once the costs of transportation, tariffs, labor and so on are added, the price becomes much higher.

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