Among the most promising halal products for the development of Russian agribusiness exports to the Middle East are chocolate, poultry and lamb. This was announced by Andrey Dalnov, Head of Industry Expertise Center of Russian Agricultural Bank (RusAg, the Bank), speaking at the open seminar “Export of agricultural products: certification and standards”.
The export volumes of chocolate from Russia to the Middle East for 2020 are estimated at USD 82 million, poultry meat – USD 28 million, mutton – USD 16 million. The region of supply includes the predominantly Muslim countries of North Africa, the Arabian Peninsula, Turkey and Iran.
“In terms of the importance of religious certification, these three products have significant difference. While it is necessary for poultry and mutton, certification is optional for chocolate and can be considered as a competitive advantage, – said Andrey Dalnov. – At the same time, Russian manufacturers are facing serious competition from world leaders, in the supply of lamb – with Australia and New Zealand, for poultry – with Brazil, for chocolate – with the EU countries. However, the very presence of these products in Russian exports indicates the degree of maturity of a particular segment of the Russian food market, and the highest degree of efficiency of the exporting company.”
In his report, Andrey Dalnov dwelt in detail on the Middle East as a major buyer of agricultural products. The top five importers of the region include Saudi Arabia, Egypt, the UAE, Turkey and Iran. These countries account for more than half of regional food imports. The region most actively imports grain, meat, dairy products, oilseeds and their processed products. These product groups account for about 50% of imports.
It is the Middle East region that ranks first in Russian exports to non-CIS countries. It accounts for 33% of supplies. In second place, by a significant margin, is the Far East region (26%), where a significant part of exports falls on China.
If we segment Russian exports to the Middle East region by export volumes in 2020 and growth rates over the past 5 years, the most popular segment includes traditional positions for Russian exporters, containing grain and vegetable oils. Growth rates here can be high (up to 30%), but for the most voluminous items – wheat, sunflower oil – do not exceed 10%.
Eight positions were in segments with high and very high growth rates (from 60% per year). The pandemic contributed to the sharp increase in the supply of ethyl alcohol. In this case, the product is exported as a raw material for the manufacture of disinfectants. The growth in the export of oilseeds and sugar indicates the continuing saturation of the corresponding segments of the Russian market. The growth of chocolate and coffee and tea extracts indicates that Russia can be an exporter of agricultural products without producing the main raw materials for their manufacture. The most rapid growth is demonstrated by the supply of poultry and mutton.
As the Head of Industry Expertise Center at RusAg concluded, in most cases, export flows in the fastest growing categories were formed in the last five years. This applies to the mentioned types of meat, coffee and tea extracts, soybeans and sugar.
By supporting exporters, Russian Agricultural Bank offers a range of financial and settlement product solutions that contribute to the development of the entire industry.
RusAg provides its own in-depth expertise in the individual structuring of complex foreign trade transactions. The Bank develops a line of trade finance products; works under all state support programs for exports, and cooperates with the Russian Export Center Group of Companies in insuring export transactions at EXIAR.
The Bank is actively expanding the limit space for cooperation with foreign banks in order to confirm export letters of credit, which allows Russian exporters to eliminate the risk to a foreign bank. To date RusAg cooperates with more than 400 partner banks in 61 countries, including those located in the Middle East.