December 11, 2009

Welcome the next world agriculture powerhouse - Russia!

The United Grain Company (UGC) will be a key component to Russia's plan in recovering its status as an agricultural powerhouse, as it works hard to boost production.

Russia aims to increase its grain exports to 50 million tonnes per year by 2020, with the UGC set to increase the purchasing and selling of grain on the domestic market and increase grain exports. These activities will be supported by constructing new port terminals and storage silos.

These factors led to the Russian agribusiness report for the first quarter of 2010 to forecast a 16.5-percent growth in wheat production and a 49-percent growth in corn production from 2009-2014.

Russia's meat consumption remains low by developed world standards, leaving plenty of room for growth. The report expects meat consumption to increase significantly over the forecast period to 2014.

The Russian government has stated its aim to become self-sufficient in pork and poultry by 2011, a goal that is seen as over-ambitious in the report's eyes. Still, Russia's poultry production is projected to continue growing rapidly to 2014, building on the 170-percent expansion seen from 2003-2007.

Import-controlling policies, state and regional government subsidies, and demand for cheaper animal protein have all boosted poultry production. The report projects a 83-percent growth in poultry production from 1.81 million tonnes to 3.31 million tonnes between 2009-2014.

Milk production is seen to increase by 10 percent from 2009 to reach 3.61 million tonnes in 2014, indicating that the Russian dairy industry is starting on the long road to recovering to its production levels during the first couple of years in the 1990s.

In October 2009, the Russian government added fluid milk, butter and three types of cheeses to a list of intervention commodities.

While no interventions have yet taken place on these commodities, the possibility adds a new dynamic to the dairy industry, the report said.