July 2, 2010
Russia may become leader in global wheat exports
Russia could overtake US as the world's leading wheat exporter within nine years, said Arkady Zlochevsky, president of the Russian Grain Union.
However, while Russia's wheat export may rank one of the highest in the world, the country's agriculture infrastructure is struggling to keep up.
The country is actively returning land to agricultural use. Six million hectares have been added since 2000, to bring the total to 48 million hectares, down from a Soviet peak of 70 million hectares. Russia is also investing in technologies and infrastructure to support grain exports. In 2002, Russia's ports had the capacity to ship just five million tonnes annually, but now they can send out more than 30 million tonnes, and the capacity continues to grow.
"Bearing in mind the country's resource and bio-climatic potential, export of foodstuffs could become one of the key elements in Russian exports," said agriculture minister Yelena Skrynnik during the recent St Petersburg Economic Forum.
According to forecasts by the Russian Institute for the Agrarian Market, in 2019 Russia could be harvesting 125 million tonnes of grain, of which 45-50 million tonnes would be exported, compared to 30 million tonnes exported by the US.
The main markets for Russian wheat are North Africa and the Middle East, while just 0.5 million tonnes head to the EU.
Yet transportation remains a major problem. Viktor Zubkov, the first deputy prime minister of Russia, said that infrastructural development has not kept pace with dynamic production growth.
Despite there being private investment over the last two years in as many as 2,000 new trucks to carry grain, the country's ageing rail infrastructure remains a challenge, with national rail carrier RZD predicting 57% of its grain transport fleet being defunct by 2015. Meanwhile, ports are close to choking point, said the Institute of the Agrarian Market.
