Page 25 - Eastern Europe Outlook 2020

Total exports for 2019 are estimated at $24bn (a negligible correction). The long-term target for exports is to reach $45bn by 2024 and Russia is still on course to hit that target.
Across the key export commodities, the ministry is to keep the grain tariff instrument (currently zero) in place to secure smooth domestic supply, and noted poultry, turkey and dairy products volumes to China. It is also targeting pork exports. China has kept its agricultural markets closed but in 2019 started to open them to Russia which should continue in 2020 and could be a major source of growth.
The budget for developing rural areas is RUB2.3 trillion until 2025, while RUB1 trillion is to be allocated from federal funds.
“Exports volumes represent a core growth pillar for Russian agriculture. In MY20F, we see the grain harvest recovering 8% y/y to 122mnt, underpinning the sizable 42.7mnt export potential that is set to see an acceleration through the season. In poultry and pork, industrial production covers 84-89% of domestic demand, and greater foreign trade would be required for further capacity additions,” VTBC said in a note.
● Other
Russian arms sales remained stable in 2018, holding on to its second place globally after the US​, a ​report released​ on December 9 by the Stockholm International Peace Research Institute (SIPRI) shows. The combined arms sales of the 10 Russian companies in the 2018 ranking were $36.2bn, making only a marginal decrease of 0.4% y/y. "Their share of total Top 100 arms sales fell from 9.7% in 2017 to 8.6% in 2018," SIPRI wrote, noting that, "this can be explained by the higher Top 100 total in 2018 due to the substantial growth in the combined arms sales of US and European companies." However, among the 10 Russian companies listed in the Top 100, the trends are mixed, with five companies posting an increase in arms sales, and another five showing a decrease. Russia’s largest arms producer, Almaz-Antey, was the only Russian company ranked in the global top 10 (in ninth position) and accounted for 27% of the total arms sales of Russian companies in the Top 100. Almaz-Antey’s arms sales rose by 18% in 2018, to
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