Russia should orient agricultural exports to countries with growing populations, increasing demand - expert

MOSCOW. Nov 16 (Interfax) - Russia should focus its agricultural exports primarily on countries where the population is growing rapidly and demand for food is increasing, said Natalia Karlova, Head of the Agrarian Markets Research Department at the Institute of Agrarian Research of the Higher School of Economics.

She made this conclusion on the basis of the world trade through 2031, prepared in collaboration with the OECD and FAO. The forecast was last issued in the summer of this year. It is updated annually.

"Firstly, Russia should focus its exports on those countries where significant population growth rates are expected. These are India, sub-Saharan Africa, the Middle East and North Africa. But you have to understand that the diet there has some specificity, because consumption there is focused on cereals and other basic products," Karlova said at the Agrarian Forum held by the Vedomosti newspaper in Moscow on Wednesday.

According to the OECD and FAO forecast, production in these countries will grow, but the rate of growth will not be enough in the face of a significant increase in population. "So they will account for the primary demand for food imports in the next decade," she said.

By 2031, world agricultural production as a whole is expected to grow by 17%, including an 18% rise in crop production and a 16% increase in livestock production. Global trade, as well as demand for agricultural products, is projected to grow more slowly. In the past decade, the average annual growth rate peaked at 5% or higher for corn, soybeans, and pork, but in the next decade, it will reach only 2.5% for rice, while most products will see growth of below 1% (grains, vegetable oil, and poultry).

Karlova pointed to the situation with vegetable oil, because this product accounts for a substantial share in the structure of Russian agricultural exports. "In light of the fact that in China and other main consumer countries there will be a significant slowing in growth of demand for vegetable oil, the potential for further development of supplies to these countries is limited, and we need to look for some other markets and diversify the geography of supplies," she said.

A significant trend is the increase of production efficiency in global agriculture, Karlova said. "However, we understand that under those restrictions, under sanctions, the access of Russian producers to technology, imported resources, equipment is very limited, and this, of course, will have a negative impact on the production and export potential in the Russian agricultural sector," she said.