6/21/2002 (Europe Intelligence Wire) - Airing their views at the secondinternational conference 'Russia's Oils and Fats Complex' on Tuesday inMoscow, representatives of Russia's fat-and-oil complex expressed disquietregarding the country's upcoming membership in the World TradeOrganization.Russia joining the WTO means expansion of trade ties, and for thefat-and-oil section more free raw materials exports and imports ofvegetable oils and fats, which will lead to tougher competition on theRussian market, director of the all-Russia scientific research institutefor fats (St. Petersburg) Alexander Lisitsyn announced.Lisitsyn said that in such conditions effective sector functioning ispossible only in the event that its products give no ground to non-Russian-made products in terms of quality and pricing, and that volume andvariety of goods are able to meet the population's and industry's growingneeds.According to the latest research, consumption of fat-and-oil industryproduct in Russia is pretty low. In particular, vegetable oil consumptionis a per capita ten kilos per year against a recommended 13.6 kilos. Bycontrast, that figure is significantly higher; in Britain it is 18 kilosper year, in the United States and the Netherlands 25 kilos.Lisitsyn said he thinks that Russian enterprises making such products haveto increase production efficiency and product quality by means oftechnological modernization and new equipment, as well as automatingproduction processes.In the opinion of the vice president at Rosselkhozakademiya, YevgenySizenko, the domestic fat-and-oil sector finds itself in a difficultsituation as Russia's WTO membership draws ever nearer. Insufficientinvestment, he said, is resulting in many enterprises having to make dowith out-dated equipment, which has a telling effect on product qualityand variety. However, the main problem is that there is not enoughdomestically-produced raw material to go around.The main oil-bearing crop in Russia is sunflower, from which around 85% ofall vegetable oils is produced in the country. Two years ago, Russiaposted a 10-year record level of oil production - 1.375 million tonnes.That figure was down 10% the next year to 1.238 million tonnes of oil.Russia joining the WTO requires of the fat-and-oil industry that it workout new state standards for product-making, noted president of the RussianUnion of Dairy Sector Enterprises Vladimir Kharitonov. This notablyconcerns products that have complex raw material formulation, which areknown in Russia today as 'combined butter', and as 'spreads' around theworld. As a result, the Russian consumer confuses 'combined butter'-theproduction of which involves the use of cheaper vegetable fats-with creambutter. The producers of the latter incur losses due to unscrupulouscompetition from producers of the former.Russia currently produces around 1.5% of the world's oilseed and 11% ofits sunflower. The country produces roughly 11% of the world's vegetableoil.

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