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News last update:14 Jan 2016

FPU demand discount on rail transportation of feed

Feed Producers Union (FPU) once again requested the Russian government to introduce discount rates for the transportation of feed grain and compound feed production by rail. The proposal was announced at the conference "Compound Feed 2013", by Vyacheslav Golokhvastov, member of the Union from Leningrad region. In support of his position he described the problems with feed transportation that is currently being observed in the Leningrad region.

"The average distance of transportation is about 2236 km. The cost of transportation was on average 2,234 rubles (US$ 74) [per tonne] but from January 1st 2013 the rate has been increased by 7%, and the main carrier, Rusagrotrans has also raised the cost of its services by 2%."

The negative consequence of these factors is the rise in prices of raw grain in all main feed consumption regions especially in the Northwestern Federal District. According to Golohvastov the initial cost of wheat is 10.5 thousand rubles (US$ 345) but with the cost of transportation it reaches 13,000 (US$ 430). The cost of barley including the cost of delivery is 11.5 thousand rubles (US$ 363), the cost of corn - 12.5 thousand rubles (US$ 402).

Similar situations are currently observed in many regions of the country. Russian experts repeatedly pointed out that one of the main problems of the Russian livestock and feed industries lies in the fact that the key grain producing and consuming regions are located too far from each other.

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