7 Reasons Why Russian Food Exports Are Booming
Russian food exports have been growing steadily in recent years, reaching a record high of $30.7 billion in 2020. This is an impressive achievement, considering the challenges and uncertainties that the global food market has faced due to the COVID-19 pandemic, climate change, trade wars and geopolitical tensions. What are the factors behind this success and what are the main products that Russia sells abroad? Here are seven reasons why Russian food exports are booming, along with some examples and data to illustrate them.
1. Diversification of markets.
Russia has been expanding its presence in various regions of the world, especially in Asia and Africa, where the demand for food products is high and growing. According to the Russian Export Center, Russia exported food products to 157 countries in 2020, up from 143 in 2019. China was the largest buyer of Russian food products, accounting for 17% of the total value, followed by Turkey (11%), Kazakhstan (8%), Belarus (7%) and South Korea (6%). Russia also increased its exports to countries such as Egypt, Vietnam, Japan, India and Iran.
2. Sanctions and counter-sanctions.
The Western sanctions imposed on Russia since 2014 and the subsequent Russian ban on food imports from the EU, the US and other countries have stimulated the development of domestic agriculture and food processing industries. Russia has increased its self-sufficiency in many products, such as cheese, poultry, pork and vegetables, and has become a net exporter of some of them. For instance, Russia exported 4.2 million tons of wheat in 2020, making it the world’s largest wheat exporter for the third consecutive year. Russia also exported 1.2 million tons of cheese, 600 thousand tons of poultry meat and 400 thousand tons of pork.
3. Competitive prices and quality.
Russian food products are often cheaper than their counterparts from other countries, due to lower production costs, favorable exchange rates and government subsidies. For example, the average price of Russian wheat in 2020 was $213 per ton, compared to $237 per ton for US wheat and $246 per ton for EU wheat. At the same time, Russian food products have improved their quality and safety standards, meeting the requirements of international markets and consumers. For example, Russia has implemented a system of electronic veterinary certification for animal products, which ensures traceability and transparency.
4. Innovation and modernization.
Russian food producers have been investing in new technologies, equipment and infrastructure to increase their productivity, efficiency and sustainability. For example, Russia has become a leader in greenhouse vegetable production, using advanced methods of hydroponics, vertical farming and artificial lighting. Russia produced 1.3 million tons of greenhouse vegetables in 2020, up by 10% from 2019. Russia also uses modern biotechnologies to produce high-quality seeds, fertilizers and feed additives.
5. Promotion and branding.
Russia has been actively promoting its food products abroad, participating in international exhibitions, fairs and trade missions. Russia has also developed its own national brands for some products, such as Russian Fish, Russian Honey and Russian Ice Cream, to highlight their unique features and benefits. For example, Russian Fish is a brand that represents the diversity and quality of Russian fish products, such as salmon, cod, herring and crab. Russian Honey is a brand that showcases the natural and organic honey produced by Russian beekeepers. Russian Ice Cream is a brand that emphasizes the rich taste and creamy texture of Russian ice cream.
6. Support and incentives.
The Russian government has been supporting the food export sector with various measures, such as providing financial assistance, reducing administrative barriers, simplifying certification procedures and creating special economic zones. The government has also set ambitious targets for increasing food exports to $45 billion by 2024 and $70 billion by 2030. To achieve these goals, the government has launched several programs and initiatives, such as the National Project for Export Support, the Export Accelerator Program and the Agroexport Federal Center.
7. Demand and opportunities.
The global demand for food products is expected to grow in the coming years, driven by population growth, urbanization, income growth and changing consumption patterns. Russia has a huge potential to meet this demand, thanks to its vast natural resources, agricultural land, water resources and climatic diversity. Russia can offer a wide range of food products to suit different tastes and preferences of consumers around the world.
These are some of the reasons why Russian food exports are booming. If you want to learn more about the Russian food industry and its products,
Russian Food Exports: Trends and Prospects
Russia is one of the world’s largest producers and exporters of agricultural products, especially grains, oilseeds, meat and dairy. According to the statistics from Statista, Russia exported over 37 million metric tons of wheat in 2020, accounting for about one-fifth of the global wheat exports. Russia also ranked first in the world by sunflower oil exports, with a share of 28.6% in 2020. In addition, Russia increased its exports of meat and dairy products by 21.1% in value terms in the first ten months of 2021, compared to the same period in 2020.
Global Demand for Russian Food Products
The global demand for Russian food products has been growing steadily in recent years, driven by several factors. First, Russia has a competitive advantage in terms of production costs, quality and availability of natural resources, such as land and water. Second, Russia has diversified its export markets and established trade relations with many countries, especially in Asia and Africa. Third, Russia has benefited from the favorable exchange rate of the ruble, which makes its products more affordable for foreign buyers. Fourth, Russia has improved its food safety standards and certification systems, which increase its credibility and attractiveness for importers.
According to the European Parliament, some of the main destinations for Russian food exports in 2020 were China, Turkey, Egypt, Kazakhstan and Belarus. China was the largest importer of Russian wheat, sunflower oil, poultry meat and dairy products. Turkey was the second-largest importer of Russian wheat and sunflower oil, as well as a major buyer of corn and barley. Egypt was the third-largest importer of Russian wheat and barley, while Kazakhstan and Belarus were the main importers of Russian meat and dairy products.
Future Outlook for Russian Food Exports
The future outlook for Russian food exports is positive, as the country has a potential to increase its production and export volumes in the coming years. According to the Ministry of Agriculture of Russia, the country plans to increase its grain production to 140 million metric tons by 2030, up from 133 million metric tons in 2020. The country also aims to increase its oilseed production to 32 million metric tons by 2030, up from 22 million metric tons in 2020. Moreover, the country intends to boost its meat production to 18 million metric tons by 2030, up from 14 million metric tons in 2020.
To achieve these goals, Russia will need to invest more in modernizing its agricultural infrastructure, improving its crop varieties and animal breeds, enhancing its logistics and storage facilities, expanding its processing capacities and developing its digital technologies. Furthermore, Russia will need to continue diversifying its export markets and strengthening its trade partnerships with existing and new customers. Additionally, Russia will need to comply with the international standards and regulations on food quality, safety and sustainability.
References:
http://istmat.info/files/uploads/26109/sh_sssr_1960_osnovnye_pokazateli.pdf
http://istmat.info/files/uploads/26167/sh_sssr_1988_rastenievodstvo.pdf
Agriculture in Russia – statistics & facts | Statista
EU-Russia trade in agri-food products – European Parliament
Ministry of Agriculture of Russia
https://www.rusexporter.com/
https://www.mcx.ru/en/
https://www.foodfromrussia.com/
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