According to a RusAg forecast, agribusiness in the Russian Far East will be enjoying a higher margin compared to elsewhere in the country over the next five to seven years, driven by low competition among domestic producers and opportunities for import substitution and expansion into the Asian markets. Far Eastern Federal District’s export lead will help broaden the range of such export items as crustaceans, soybeans and fish, said Dmitry Zhilyakov, Head of Industrial and Technological Expertise at RusAg, speaking at an Eastern Economic Forum session titled The Far Eastern Agricultural Complex: A Driver of Growth or a Missed Opportunity?
In 1H 2021, agribusiness exports from the Far Eastern Federal District (FED) stood at USD 1.9 billion (up 5% in money terms y-o-y). FED scored fourth in terms of its share in total exports (13%), almost on par with the Volga, Siberian, Ural and North Caucasus Districts (15%).
Growth was propelled by such export categories as crustaceans (USD 668 million, +47%), soybeans (USD 233 million, +196%) and fish fillets (USD 138 million, +29%) – categories with a combined share of 54% in FED’s exports.
‘FED’s competitiveness is shaped by its unique export categories, proximity to foreign markets and by attractive pricing. A good example is crustaceans and soybeans, Russia’s third and tenth largest export items in 1H. FED farmers’ share in these exports was 77 and 72 per cent respectively in value terms. We also see good prospects for meat, dairy products and animal feed. Deeper processing and a broader export range will help ramp up FED’s export operations,’ said Mr Zhilyakov.
FED’s export potential will be further boosted by the development of a logistics infrastructure and classification of land areas as land for agricultural purposes. FED ranks second in Russia by the potential it has of using fallow agricultural land for growing oilseeds (265,100 hectares, 26% of the national indicator).
RusAg presented the following vision for Russia’s largest exporting regions.
Primorsky Krai can export more oil and fat, fish products, ice cream, canned fruits and vegetables, as well as meat, meat products and soft drinks.
The staple export item of Kamchatka Krai is frozen fish, but the region can export more canned food and semi-finished fish products.
Sakhalin Region’s export focus is on crabs and pollack, but its export potential also lies in fish and fish products.
Khabarovsk Krai can also export more fish products and expand the export range of such items as soybeans and processed soybeans; dairy products and soft drinks.
Amur Region specializes in oilseeds and processed oilseeds and can diversify with dairy, meat products and food ingredients.
Mr Zhilyakov believes that, in addition to exports, agribusiness in the Far East can be driven by putting in place facilities that would satisfy domestic demand for staple products, and this is what makes FED different from the rest of the country at large.
FED has the potential of consuming more tomatoes (by 70,000 tonnes), cucumbers (by 35,000 tonnes), lettuce (by 20,000 tonnes), dairy products (by 220,000 tonnes) and turkey meat (by 10,000 tonnes). Domestic demand for pork is expected to be satisfied by commissioning two agribusiness facilities currently under construction.
According to Mr Zhilyakov, projects launched over the past two years in the Far East with RusAg’s support will bring in more than RUB 22 billion in investment, including in agricultural production and processing, raw milk production and construction of a fishery.
‘Given the Far East’s unique geography, its potential for import substitution and export, availability of special economic zones and low competition, agribusiness there can earn returns that are double the national average, 20 vs. 11 per cent, and this situation will prevail in the mid-term,’ added Mr Zhilyakov.