Russia Sets Record Food Exports Amid Pandemic, Rising Prices

Russia exported a record amount of food supplies in 2020, becoming a net seller of agricultural products for the first time since the collapse of the Soviet Union.

The country sold $30.7 billion worth of agricultural goods abroad last year, news site RBC reported Tuesday, citing a report by AgroExport, a division of Russia’s agricultural ministry. In volume terms, Russian producers shipped 79 million tons of grain, meat, fish, vegetables, dairy and other products around the world.

Both figures were a record for the post-Soviet era, with earnings jumping 20% on 2019 figures — boosted by a strong harvest in Russia and rising global food prices. With food imports coming in at $29.7 billion according to separate government data, 2020 was also the first year in which Russia was a net exporter of agricultural goods.

Grain remained the largest component of Russia’s export mix, making up more than half of Russia’s agricultural goods sold abroad in weight terms, and bringing in a third of all earnings. Russia saw its second strongest grain harvest in history last year.

The biggest increase was in meat exports, which rose 49% over the year to a total value of $900 million, on the back of strong and growing demand from China.

China took the number one spot as Russia’s largest agricultural export market, accounting for 13% of sales, followed by Turkey on 10% and Kazakhstan with 7%, according to the Agro Export report. In total, Russia exported agricultural products to 150 different countries.

Boosting Russia’s agricultural sector — an industry which has had significant geopolitical, security and economic importance since the early years of the Soviet Union — has become one of President Vladimir Putin’s key economic goals over recent years.

Russia banned agricultural imports from the EU, its largest food supplier accounting for more than half of all food imports, in 2014 in retaliation for western sanctions against Russia following the annexation of Crimea. That kick-started an import substitution drive as the country scrambled to develop domestic alternatives to European dairy products, fruits, vegetables and meat.

Putin wants to further increase Russia’s agricultural imports by another 50% over the next three years, according to his ambitious economic development targets. At the same time, RBC reported experts do not expect a dramatic increase in export volumes in the near future, pointing to the Kremlin’s recent tax hike on agricultural exports as it attempts to keep excess food supplies at home amid rapidly accelerating prices.

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