This year, Russian farmers can harvest up to 150 million tons of grain, but a large harvest is a problem.
After all, domestic consumption does not exceed 80 million tons, and everything else needs to be implemented somehow.
At the same time, it has never been possible to do this in full6 according to Rosstat, annual crop losses reach 5-7%.
They start in the field, because agricultural machinery is largely outdated and is not able to provide a “clean” harvest.
The problem is also the lack of storage facilities, which are mainly owned by the manufacturers themselves.
By the way, Russia is unlikely to be able to break this year’s record and collect even more grain in the near future: the total volume of all storage facilities does not exceed 146 million tons.
Where to put the harvest?
Obviously it needs to be exported.
To facilitate the process, the Ministry of Agriculture of the Russian Federation decided to increase the export quota for grain for the current season: it will amount to 25 million tons.
This is a lot compared to last year’s quota of 11 million tons.
At the same time, if we recall the difference between the harvest and domestic consumption, this is not enough: the difference is about 60 million tons.
At the same time, due to the difficult geopolitical situation and sanctions, the export of grain to many countries of the world from Russia is difficult.
Would exporting flour help?
On the one hand, this would save the situation, because sanctions, as a rule, do not apply to flour.
But here, too, there are many difficulties. Firstly, we have never developed an extensive export of flour: for example, in 2021, 38 million tons of grain were exported, and only 260,000 tons of flour, according to the Ministry of Agriculture.
And it is unlikely that it will be possible to sharply increase this volume by several orders of magnitude. According to the same Ministry of Agriculture, the maximum volume of flour exports from the Russian Federation will not be able to exceed 430,000 tons.
Why?
- Undeveloped logistics.
Flour is a much more demanding product than grain, it cannot be transported on simple barges, containers are needed.
And Russia simply does not have the necessary quantity of them, and in any case, it loses in terms of the cost of container transportation to other countries.
- No demand.
Flour is not required by the world market in such volumes as grain, usually each country processes it independently.
After all, flour, among other things, has a much shorter shelf life.
Therefore, even if Russia were ready to offer tens of millions of tons of this product, there would simply be no buyers.
One of the possible ways out is to master deeper processing.
For example, last season Russia sold abroad confectionery products worth $1.6 billion, chocolate — $872 million, flour confectionery products — $557 million, and sugar confectionery — $210 million.
Further movement in this direction would contribute to the liberation of Russia from the «resource curse» and the diversification of supplies.
