Potential for Russian vodka exports put at $180 mln/year - Agroexport

MOSCOW. Nov 15 (Interfax) - Russia could potentially export 120,000 tonnes of vodka worth $180 million per year, the Agroexport Center said in a report.

This estimate takes into account the recovery of global demand for vodka and future growth. The most promising markets are countries in the former Soviet Union, foremost Kazakhstan, Armenia, Azerbaijan and Turkmenistan, given their already established steady demand for Russian alcoholic beverages, the center said.

Demand for alcoholic beverages, including vodka, could also increase in centers of international tourism such as the United Arab Emirates and Turkey. The most promising markets in Asia are China, India and Vietnam, the center said.

Russian vodka exports grew by an annual average of 1.6% by volume and 5.5% by value in 2017-2021, and totalled 23 million liters worth $168.3 million in 2021. But in 2022 exports plunged 54% by volume and 41.9% by value due to a drop in exports to Germany, the United Kingdom, the United States and Lithuania, which were the main importers in the past. In 2021, Lithuania accounted for 18.4% or $31 million of Russian vodka exports, while Germany and the UK accounted for, respectively 15.3% or $25.8 million and 13% or $21.9 million.

Russia was the eighth largest vodka exporter in 2022, with a market share of 4.1% or $97.8 million. The export price was $1,772 per tonne.

The CEO of major Russian vodka producer and exporter Roust Group, Ilya Blinov was cited in the report as saying that countries that are closed to Russian exports due to sanctions account for 65% of global vodka consumption outside of Russia.

"Nonetheless, the remaining 35% of the world market is 92 million 9-liter cases in physical volume and more than $11 billion in monetary terms, which still means huge potential for growth and development of vodka exports from Russia. Friendly countries are very welcoming of Russian products, including Russian vodka," Blinov said.

Vodka production in Russia grew by 3.9% to 841 million liters in 2022. Production grew by an average of 1.7% per year in 2018-2022. The strongest growth was 6.3% in 2019. The steep drop in output in 2022, when production fell 4.9% to 795 million liters, was due to the pandemic.

Russia is the world leader in vodka consumption with 777 million liters in 2022 or 26.3% of the global market. The United States was second with a share of 24.2%.