Page 18 - bne_newspaper_October_13_2017

Eastern Europe
October 13, 2017 www.intellinews.com I Page 18
Russia to earn $20bn from grain exports
Vladimir Kozlov in Moscow and Ben Aris in Berlin
Russia will earn more this year from exporting grain than it will from exporting arms, following a huge harvest that nearly broke the country’s all- time record.
Russian food exports in 2017 could amount to $20bn, Agriculture Minister Alexander Tkachev was quoted as saying by TASS on October 10. "Russian food exports actively develop in the past years. It multiplied by 3.5 times in the past decade – from $5bn to $17bn in 2016," Tkachev said.
"We expect the exports to amount to about $20bn in 2017."
"I would like to note that not only the growth of exports is important, but also their diversification in terms of both geography and structure," he added.
Dmitry Shugaev, director of Russia’s FSMTC agency, which oversees arms exports and imports, told reporters at the Paris Airshow in June that Russia continues to enjoy demand for military aircraft, which account for 40% to 50% of its annual arms exports that have been running at a steady $15bn, reports Reuters.
The Russian government earned $73bn in revenues from the export of oil and gas in 2016, way down on the circa $200bn it earned in the boom years. This year revenues will be a bit higher than 2016 thanks to a partial recovery in
oil prices, rising production and higher taxes.
In late September, local officials said that Russia is on course to bring in the biggest harvest since independence and almost as much as the Soviet era all time high.
With only a few weeks to go until the harvesting is over the grain collection was already up 12% y/y to 123.4mn tonnes and was expected to reach 127mn tonnes. The most Russia (including during the Soviet-era) has ever collected was 133mn tonnes in the 1970s.
The government has been pouring investment into the sector following the self-imposed ban on the import of European agricultural products in a tit-for-tat sanctions battle with the west. In 2016 agriculture was the only sector to show growth, although the growth this year has been lower.
In the new 2018-2020 budget the government has increased spending on two key sectors: the social sector and agriculture. This is partly to make Russia autonomous from imports from Europe, but increasingly grain is the new oil, earning Russia significant foreign exchange revenues that are helping to keep the current account in the black. Russia will almost certainly retain its title as the world’s biggest grain exporter in this agricultural season.