Russian business expecting grain exports to be discussed during Putin's visit to China

MOSCOW. Sept 21 (Interfax) - Russian business is expecting Russian wheat exports to be discussed and a solution to this problem to be found during Russian President Vladimir Putin's visit to China in October.

"We are hoping that the meeting of President Putin and President Xi planned for October will bring relief in this area [phytosanitary certification of grain exports]," President of the Russian-Asian Union of Industrialists and Entrepreneurs Vitaly Mankevich said at a press conference in Moscow.

Russian grain exports to China increased 15% last year, including almost 80% growth in wheat exports, "which is far from being the main agrarian export commodity," he said. "Thirty thousand tonnes - we are talking about wheat - is a rather small amount of Chinese imports in terms of the Russian agrarian industry. Russia accounts for only 0.5% of the overall wheat imports by China," Mankevich said.

The reason is the complicated phytosanitary certification rules and some other restrictions in China, Mankevich said. "This seriously affects the exports of wheat, corn and barley. The possibility of faster interaction with oversight agencies and issuance of permits for the delivery of winter crops, which Russia produces in much greater volumes than spring crops, and corn from the entire national territory would improve the situation a lot. There is a need to ease the regulatory pressure," he said.

For now, Russia is allowed to export only spring wheat to China.

As reported, Russia sold $7 billion worth of agricultural products to China in 2022, up more than 40% from the previous year.

"The growth continues but it is very uneven. Things are going well with the export of oil, especially rapeseed oil. We see a high demand for legumes and oilseeds, we supply meal, which is also in great demand. Rail and sea transportation are well established for these segments. But the current congestion of logistics routes and the availability of checkpoints to support the intensive trade turnover require new solutions," he said.

One of the solutions is the establishment of joint production facilities in Russia, Mankevich said. "This is advantageous for both sides. Russia gets investments and an opportunity to make products with added value, creates jobs and increases exports of end products. In turn, China gets quality products in the necessary amounts and at an attractive price thanks to cutting the costs of logistics," he said.