9 min.
1487 pplExports of Russian agricultural products are actively growing, and revenues to the federal budget from the sales of surplus food on world markets are second only to revenues from oil and gas. In 2023, Russia sold $43 billion worth of agricultural products, which is 14% higher than the previous season. Main growth drivers: grains and legumes, vegetable oils, milk powder, oilseeds, and meat.
Contents
Reasons for the Growth of Exports of Russian Agricultural Products
According to experts, two main factors have influenced the increase in food supplies from Russia to the worldwide market.
The main factor is the successful development of the Russian agricultural sector. Thanks to the embargo on the supply of products from unfriendly countries and state support for agricultural producers, production efficiency and adoption of new technologies have increased, the industry has attracted private investment, yielding surplus for the export resources formation. Moreover, the proposals of Russian exporters include both traditional grains and vegetable oils and other types of products. The trend is shifting towards the production of ready-to-eat export products, including meat and dairy groups.
Second, the world faces an aggregate demand for food from poor countries and rich countries. The main trend is the growth in consumption of both agricultural raw materials and high-quality protein, fat and high value-added vegetable products.
Under present-day conditions, Russia has reoriented exports of agricultural products to friendly countries. And this made it possible to expand the geography of meat supplies to 41 countries in 2022. And in 2023, the right to supply 9 more types of food products to 5 countries was obtained. In addition, the Russian Government pursued an active policy to remove barriers and phytosanitary restrictions on product export. To search for new markets and lobby the interests of Russian agricultural producers, a network of agricultural attachés operates at the local level.
Export Results
Grain
According to Bloomberg, thanks to high yields and low production costs, Russia has consolidated its leading position in the wheat market in 2023 and can now set the grain price floor. According to Rosstat, in 2023, grain harvest amounted to 142.6 million tons, including 92.8 million tons of wheat. To stabilize domestic prices, the Russian Government introduced temporary restrictions on the export of rice and durum wheat.
According to the Federal Customs Service, in 2023, grain supplies to the foreign market exceeded previous year’s figures. As of mid-December, exports of grain and grain products amounted to about 80 million tons, which is 58% higher than in 2022. Most of shipments are directed to friendly countries: Tunisia, Brazil, Yemen, Tanzania, etc. Shipments also increased to the EAEU states: Belarus (+48%), Kazakhstan (+43%), Kyrgyzstan (+44%). Russian peas began to arrive in Algeria, North Korea, Portugal, India and Hungary, and corn — in Venezuela, Serbia, Egypt, Qatar and Oman. Wheat supplies to Indonesia have resumed with a good annual rate of 11 million tons.
An important event of the year was the exclusion of thistle from Vietnam’s phytosanitary restrictions on the import of Russian wheat, which had previously led to a supply curtailment. During the year, Rosselkhoznadzor carried out extensive work to remove barriers to grain exports to the Chinese market. As a result, phytosanitary requirements for Russian peas, corn and rice were agreed upon. Ultimately, by December 17, the record-setting 5.5 million tons were sent to China, which is 3 times more than the previous year.
Yet, wheat supplies to China are still showing modest results. In the 2022/2023 season, China imported 12 million tons (with its own annual production of 137 million). The main suppliers were Australia, Canada, and the USA; Russia accounted for only 0.5%. The reason for such low trade volumes lies in the history of relations between countries. In 1976, and then again in 1997, China imposed a ban on the import of Russian wheat due to contamination with dwarf bunt. After several inspections in 2015, the ban was lifted for some Russian regions. And only in 2022, the wheat imports to China were allowed from all Russian territory. Yet, lifting phytosanitary restrictions is only part of the problem. According to experts, exports are also slowed down by logistics.
Vegetable Oils
According to statistics from the Fat and Oil Union, in 2023, Russia exported 10.5 tons of fat and oil products. Compared to the previous year, the supplies grew by 29%. The main volume of shipments accrues to sunflower oil — 6.3 million tons, while the export of rapeseed oil amounted to over 1.5 million tons, and oil cakes — up to 4 million tons. The boost in export is attributed to the record oilseed harvest in 2023, a significant increase in shipments by sea to China and India, as well as expanded ties with leading product importers on the global market.
Flour
According to the Federal Center "Agroexport", in 2023, Russia exported over 1.1 million tons of flour, which is 36% higher than the previous season. The main buyers are Iraq, Afghanistan and Georgia. Compared to 2021, supplies increased 4.2 times.
Fruits and Vegetables
According to Rosselkhoznadzor, in 2023, the growth in exports of vegetables and fruits compared to the previous season was 55%. In particular, 326 thousand tons of potatoes, 87 thousand tons of garlic and onions, 15 thousand tons of root crops were shipped.
Meat and Unfertilized Eggs
According to the National Meat Association, in 2023, Russia exported over 750 thousand tons of meat worth almost $2 billion. Compared to the previous year, pork supplies to Vietnam increased almost 2 times, and 4 times to Armenia and Serbia, an increase was noted for shipments to Hong Kong, Mongolia and Belarus. The increase in pork exports amounted to almost 70%, shipments of horse meat increased by 22%, and lamb shipments increased almost 9 times.
In the first half of the year, supplies of poultry meat abroad to regular customers in China, Vietnam, Azerbaijan, Benin, Belarus and Kazakhstan traditionally remained at a high level. The supply of unfertilized eggs increased 1.5 times: volumes of purchases increased in Kyrgyzstan and Kazakhstan.
However, on the domestic market, the cost of chicken meat and eggs has increased sharply. Thus, according to Rosstat, from the beginning of 2023 to November, the price of unfertilized eggs increased by 36.54%. The reason for the rise in the price of chicken meat and eggs is that the essentials for their production (equipment, vitamins, veterinary drugs and other ingredients) are purchased in the European Union for foreign currency with its high inflation rates.
It should also be considered that in 2023, a bird flu epidemic occurred in a number of regions, which provoked a shortage and an increase in prices for chicken. To slow down the price surge, the Russian Government took a series of steps, as a result of which these goods temporarily turned from exported to imported. To speed up price stabilization, chicken meat and eggs are expected to arrive in Russia from friendly countries at zero duty.
Fish
At the end of 2023, the volume of supplies of fish products to the worldwide market amounted to about 2.3 million tons, which corresponds to the previous year’s figures. These data were reported by the All-Russian Association of Fisheries. Plus, Russia controls ⅔ of a crab market segment, and also has strong positions in the pollock, cod and herring markets.
