Russia raises agricultural exports by fifth

Agricultural products became an essential component of Russia’s export mix: in 2020, food exports exceeded imports for the first time in modern history. Last year’s strong grain harvest and rising global food prices helped the country to gain weight as a food supplier.

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, reports The Moscow Times. According to a recent report of Agroexport, which is a division of Russia’s Ministry of Agriculture, the country’s producers sold 79 million tonnes of agricultural goods such as grain, meat, fish, vegetables, dairy and other products abroad in 2020. In money terms, the volume of exports surged by 20% compared to 2019 and amounted to $30,7 billion. As last year’s food imports totalled $29,7 billion, 2020 turned to be the first post-Soviet year when Russia became a net exporter of agricultural goods.

The geography of exports was also very extensive. Overall, Russia supplied agricultural products to 150 different countries. China, which accounted for 13% of all sales, became Russia’s largest agricultural export market followed by Turkey and Kazakhstan with 10% and 7% respectively, reads Agroexport’s report. China’s growing demand for meat resulted in a record increase in meat exports, which grew by 49% year on year to $900 million. However, grain remained the largest component of Russia’s export mix, as it accounted for more than half of Russia’s agricultural products sold abroad in weight terms and a third of all earnings. In 2020, Russia harvested its second-largest grain crop ever.

Russia’s agricultural sector, which has had significant geopolitical, security and economic importance since the early years of the Soviet Union, has received a strong impetus over recent years as one of President Vladimir Putin’s key economic goals. In 2014, the Kremlin suspended agricultural imports from the EU, which accounted at that time for more than half of all Russian food imports. It pushed the country to develop domestic alternatives to European dairy products, fruits, vegetables and meat.

Putin’s ambitious economic development targets envisage a further increase of 50% in Russia’s agricultural exports over the next three years. Meanwhile, experts consider a significant increase in export volumes in the near future unlikely given a recent tax hike in agricultural exports, as the Kremlin attempts to keep excess food supplies at home to constrain food inflation.

By Anna Litvina