Africa could become a significant buyer of Russian agricultural products - experts
MOSCOW. Aug 22 (Interfax) - Africa could become a significant buyer of Russian agricultural goods, experts at the Agriculture Ministry's Agroexport center said in a statement.
Last year, Africa accounted for 12% of Russia's agricultural exports, the center said. This includes deliveries of 11.9 million tonnes of wheat worth $3.3 billion, 244,000 tonnes of sunflower oil worth $318 million, 223,000 tonnes of soybean oil worth $260 million, and 944,000 tonnes of barley worth $231 million.
From 2017 to 2021, exports of meat products grew 13-fold in volume terms (to 25,000 tonnes) and 19-fold in value terms (to $38 million).
"At the moment, the main focus of Russian exporting companies s is to ensure sustainable growing supply volumes to North African countries. At the same time, there are nations in East, West, South and Central Africa which are currently underdeveloped as trade destinations, but are extremely interesting in terms of their potential," Nikolay Lantsev, director of the advisory services practice of Trust Technologies, was quoted as saying in the statement.
In order to expand the presence of Russian products, Agroexport, together with Trust Technologies and the industry and expert community drew up a concept for the development of exports of principal agricultural products (grain, dairy, butter, meat and confectionery products) to promising markets of African countries. The goal of the project is to prepare a practice-oriented model for increasing supplies and enhancing the competitiveness of Russian agricultural goods.
Nine nations - Tunisia, Ethiopia, Kenya, Mauritius, South Africa, Angola, Cameroon, Nigeria and Ghana were chosen as target markets in the concept. These countries account for 40% of the continent's population and one third of all African imports of agricultural products. According to ITC Trade Map, the total volume of imports of agricultural products in these countries in 2021 amounted to almost $33 billion.
Russian grain is competitive in the markets of target African countries and is already in demand. At the same time, grain crops have a high potential due to the expected increase in their purchases. Due to a growing population and limited opportunities to increase domestic production, grain imports are expected to grow by 8 million tonnes from 2021 to 2030. In Nigeria and Kenya alone, the baking market has grown at an average annual rate of 38% over the past 5 years.
Another strategic area is deepening of cooperation in trading of oil products, primarily vegetable oils. Since 2016, oil imports in the target countries have grown twice as fast as agricultural imports overall, and by 2025, oil sales to the target countries will grow another 67%.
The African countries that are being studied together import more than 1.3 million tonnes of meat products a year. The leaders by volume of imports are South Africa, Ghana and Angola. "Analysts estimate that consumption of meat products is expected to increase in many countries of the African continent. And while poultry meat will account for the bulk of growth as the most affordable and technologically advanced, organic growth will also be seen in all other types of meat," Konstantin Korneev, executive director of Rincon Management, saw cited as saying in the report.
According to estimates, the potential supply of meat products from Russia to priority African countries by 2030 could reach 148,000 tonnes.
There is also potential for boosting the supply of Russian dairy products. The first dairy product for which stable supplies from Russia have been established was ice cream. However, significant opportunities are opening up for shipments of milk powder, whey, cheese and butter, experts said.
According to forecasts, the milk deficit in Africa in 2025 will increase to 12.9 million tonnes (in milk equivalent) from 8.9 million tonnes in 2019. In 2030, it will reach 17 million tonnes. Africa currently imports $4.8 billion worth of dairy products, with the target countries among the top 20 importers.
As for the supply of finished food products, experts believe that for a long-term presence in Africa, the optimal scenario is to localize production to meet market needs. South Africa, Ghana and Kenya are identified as priority countries for this scenario. The volume of consumption of finished food products in the target countries exceeds $29 billion a year.
"The African continent is an interesting and promising area for the development of Russian food exports. However, when working in this market, it is important to take into account a number of factors: strong differences in the level of welfare of the population, political instability in some countries, state regulation of prices for a number of goods, etc. The materials of the concept can help Russian business determine priority countries for organization of supplies and choose the focus range taking into account market peculiarities," Agroexport head Dmitry Krasnov was quoted as saying in the statement.