PROSPECTS

Strong government initiatives continue to drive the development of Russian agriculture industry

 

  • Food Security Doctrine (2010)
    • Share of domestic production in total supply of commodities in the range of 80% to 95%
  • State Program on Development of Agriculture and Regulation of Agricultural Commodity Markets 2013-2020 (“SPDAR”)
    • Implemented to achieve goals in the Food Security Doctrine
    • Examples of agriculture development under the SPDAR
      • Agriculture machinery
      • Crop and animal production
      • Animal breeding
    • Amended in 2017 to focus on agricultural investments and exports
  • Various subsidies including partial compensation on capex investments into agricultural equipment and subsidies for dairy farmers

 

Milk deficit in Russia as an opportunity for domestic dairy producers

 

  • Russia has suffered from milk deficit
  • Estimated milk deficit of 5.2 million tonnes in 2017
  • Raw milk prices have increased approximately 37.4% over the period from 2013 to 2016

 

Expansion of Russian agriculture export to other countries

 

  • Export of Russia agriculture product expected to increase with new trade opportunities abroad opportunities in Southeast Asia, the Middle East and Latin America
  • Agriculture’s share of total exports increased from 3% in 2013 to 6% in 2017
  • According to the USDA FAS:
    • Global wheat exports increased from 18 million tonnes in 2013 to 41 million tonnes in 2017
    • Projects global wheat trade to increase by 22 million tonnes or approximately 16% during the period 2014 to 2023

 

Stable consumption of domestic agriculture produce

 

  • Sales of Russian domestic market have been strong due to:
    • Depreciation of RR causing imported goods to be less competitive
    • 2014 import ban on a wide range of EU food and agriculture produce
  • Resilient against changing economic trends
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