Sep 24 | 2018
Agriculture in Russia is in an extremely strong position right now – but what’s driving the market? Let’s look at the top 5 trends in Russian crop farming.
5 Russian agricultural trends
Here at YugAgro, we’re constantly on top of the big industry developments, including the trends that are fuelling Russian farming. Time to dive into some of the biggest in detail.
600 hectares of greenhouse facilities have been built in Russia, helping it turn from an import-reliant country into an all-season fruit and vegetable grower. Since 2016, the volume of hothouse-cultivated vegetables has grown 31%. In total, about 800,000 tons of greenhouse crops are grown every year.
Even though greenhouses are reducing Russian reliance on imported produce, the technology used to design and build them comes from abroad. In particular, Dutch, Japanese and Israeli firms are seeing their equipment used in complexes across Russia particularly in the Arctic Circle, flying in the face of even the harshest Russian winters.
10% of all greenhouse construction takes place in Krasnodar, the home of YugAgro and the beating heart of Russia’s farming sector.
Organic food comes into focus in Russia
By the next decade, Russia will have potentially transformed itself into perhaps the world’s largest supplier of organic food. The country wants to supply 25% of global organic food stocks by then. That’s a big ask – so is Russia really up to the challenge?
Just 0.2% of arable land nationally is organic. But Russia has an ace up its sleeve: land reclamation. Vast acreages have been left fallow since the Soviet Era. Between 80-100 million hectares is up for rejuvenation and is likely to be turned over to organic farming.
For context, the volume of organic-appropriate farmland has grown 5,400% since 2005.
A new production, storage and transportation law is coming into force in 2020, aimed at ensuring a more stable environment for organic farmers to thrive in. Let’s hope it pays off for Russia’s farming professionals.
Agricultural production changes Russia’s role in Asian food supplies
In September 2018, Nobel Prize-winner Professor Ricardo Valentini identified Russia as one of the future leaders of global food production. Speaking at the Far East Economic Forum in Vladivostok, Professor Valentini highlighted Siberia and the Far East’s potential for agriculture. And with that, Russia’s promise as a global agricultural powerhouse.
At the conference, Professor Valentini pointed out the region’s proximity to some colossal markets: China, Japan and Korea. All three nations are voracious consumers of imported fruits and vegetables – something which Russian producers can supply with higher investment in technology.
“I think in Russia there's a lot to do and this region, of course, has potential exporting food to China or to Asia, and there is in Japan and China a lot of demand for healthy food and good food, so again, this is another soft economy that can bring business here,” Professor Valentini told Russia’s Sputnik News.
That means more investment in things like water extraction pumps, soil-enhancers, and of course the ever-present, ever-needed greenhouse tech.
China alone is already a $1.13bn market for Russian food exports, including significant quantities of soybeans and sunflower seeds. With further investment, this could bloom exponentially and help drive Russia towards the status as Asia’s top external food supplier.
Imported farming equipment & machinery rules the Russian roost
Agricultural machinery is an import market worth $1.2bn in Russia. Foreign manufacturers are well suited to Russia – especially in a farming industry where machinery fleets have halved over the last decade.
From tractors to ploughs, there’s a deficit in the volumes of required farming technologies – and its international companies that are reaping the benefits of this shortfall.
European manufacturers, in particular, are enjoying a big payday thanks to Russia. Asides from neighbour and Eurasian Economic Union partner Belarus, Germany and The Netherlands are the two major exporters of farming machinery. Together, the two countries collectively export nearly $650m worth of equipment to Russia annually.
Russian crop exports are growing
Russia has been the world’s chief wheat exporter for the past couple of years – since 2016 at least. This shows no signs of slowing.
According to the Federal Customs Service, overseas sales of Russian wheat grew an estimated 80% between Jan-July 2018, compared with 2017’s levels. That’s more than half the world wheat market – exceptional work for a country that 20 years ago was a net wheat importer.
The Middle East is quickly turning into a major hub for Russian agricultural produce. Algeria, Egypt, Lebanon, Turkey and Iran are importing greater quantities of wheat, meslin, and other grains from Russian farmers.
China is also buying increased volumes of Russian produce. Grain exports there have reached historic levels. 1.23m tons have been shipped to the Chinese market since July 2017.
Overall, Russian agricultural exports are expected to have grown by 3% overall by the end of 2018. If these predictions are correct, then the grand total would hit 120.7m tons, smashing yet another post-Soviet export level record.
Help power Russian agriculture at YugAgro: Russia’s no.1 agricultural & crop farming exhibition
Excited by these trends? Want to experience them in person and help grow Russia’s agricultural sector even further. You can at YugAgro.
YugAgro is the largest international agricultural machinery and equipment exhibition. It is Russian agriculture’s meeting place – and the place to meet Russia’s top buyers.
From private farmers to heads of major agroholdings, YugAgro puts exhibiting companies directly in touch with the buyers who matter most.
What’s more, the exhibition is the only event of its kind in Russia’s chief agrarian province of Krasnodar, positioning machinery and equipment suppliers in Russia.