United Grain Co willing to invest in Brazilian port infrastructure
MOSCOW. Dec 14 (Interfax) - Russia's OJSC United Grain Company (UGC) is willing to invest in the development of Brazil's port infrastructure.
"UGC is willing to invest in the Brazilian port infrastructure, especially, export terminals, this is an area of interest for us," the company's CEO, Sergei Polyakov, said at the second Brazil - Russia: Strengthening Strategic Partnership business forum in Moscow Friday.
This will help establish a steady flow of goods in both countries and give greater protection to trade, he said.
UGC is also "willing to look at the nearest approaches to ports. We know that Brazil has major traffic jams at port approaches and we see the need for more efficient rail infrastructure," he said. That would help avoid many problems that cause importers to reject Brazilian food, because products do not reach ports on time.
"We are also very happy to welcome investment from Brazilian partners and for them to look at our agricultural infrastructure," he said.
Russia and Brazil are not yet using all their potential for agricultural and food trade, Polyakov said. The potential of Russian wheat supplies to Brazil is 2 million to 3 million per year, he said.
"But wheat cannot get to Brazil and Russia is not using its potential to the full for imports of Brazilian soybeans," he said. "Russia and Brazil could jointly set up a kind of pipeline where ships with wheat and fertilizer are going in one direction and ships with Brazilian soybeans are going in the other."
He said this "grain pipeline would be the ideal logistics to ensure steady and reliable trade relations between the two countries."
"We estimate this steady annual turnover, which we could without two much difficulty start next year, at 5 million tonnes," he said.
There are still various barriers hindering this project, he added. Russia needs to lift almost all barriers on soybean imports, while Brazil has phytosanitary restrictions on Russian wheat.
"We would like to see all barriers lifted," he said.
Within the framework of the South American common market group MERCOSUR there is a quota for wheat imports and a 10% duty, Polyakov said. "This is actually a prohibitive duty for Russian wheat and it is time to lift it - especially as Russia has become a WTO member," he said.
"We need to open markets up to each other and lift non-trade restrictions, which will allow us to ensure an optimum flow of trade," he said.