MOSCOW: Russia, the world’s main wheat exporter, is increasing its Baltic Sea ports as it goals to spice up agricultural exports by 50% by 2030 whereas lowering dependence on conventional Black Sea routes, officers and executives stated.
The nation, which exported at the least 72 million metric tons of grain within the 2023/24 season, is taking a look at new markets in Latin America and Africa to diversify from its conventional grain markets in North Africa and the Middle East.
It has relied on its Black Sea ports to deal with booming agricultural exports for the previous many years however the battle with Ukraine has made the world dangerous for delivery with either side often putting one another’s services and infrastructure.
“Last year with its record harvest showed that with the pace of loadings for exports, we do not have enough capacity,” Ksenia Bolomatova, deputy head of state-controlled agricultural conglomerate OZK, which owns a number of Black Sea terminals, advised an business gathering in Sochi in southern Russia.
In the final 18 months, Russia has launched two main ports, Vysotsky and Lugaport, within the Gulf of Finland, not removed from St. Petersburg, President Vladimir Putin’s hometown.
Vysotsky shipped its first grain in April 2023, whereas Lugaport started operations in June this yr and capability is anticipated to achieve 7 million tons by early 2025, in keeping with its proprietor Novaport.
Dmitry Rylko from the IKAR agricultural consultancy stated the 2 ports will be capable of deal with as much as 15 million tons of agricultural exports, together with grain, per yr.
That would account for 1 / 4 of Russia’s 60 million tons of grain exports forecast for the 2024/25 season.
Private agency Primorsky UPK can also be planning a grain terminal at Primorsky port with capability of as much as 5 million tons.
Export constraints
Putin set out a objective to extend agricultural exports by 50% by 2030 as a part of a method to cement the nation’s place as an agriculture superpower together with Brazil, the United States and China.
Russia has develop into the world’s largest exporter of wheat, corn, barley, and peas within the final decade, however additional progress could possibly be constrained by delivery capability bottlenecks.
Many Russian ports introduced plans to spice up capability after file harvests within the final two years. The Baltic Sea terminals are anticipated to increase at a quicker fee.
“The expansion of the Baltic Sea terminals’ capacity is a question of economic and transport security and sovereignty,” Novotrans stated in an emailed remark.
Russian commerce flows and shipments have thus far seen no main disruptions within the Baltic, the place 96% of the shoreline belongs to NATO members, together with Finland and Sweden.
By distinction, disruptions are rising within the Black sea and will cut back international grain provides, in keeping with a report by the World Bank. Two weeks in the past, a Ukrainian vessel carrying grain to Egypt was hit by a missile.
In August, Russian native authorities stated Ukraine sank a ferry carrying gasoline tanks in Port Kavkaz, which can also be used for transshipment of grain.
Economic attraction
Russian exported 62 million tons of grain by sea within the 2023/24 season with 90% of provides going by way of the Black Sea, principally to markets within the Middle East and North Africa. This share is ready to fall as Baltic Sea infrastructure grows.
Baltic Sea ports loaded 1.5 million tons of grain final season, a three-fold improve from the earlier season however nonetheless simply 2.4% of general Russian exports, in keeping with Reuters calculations based mostly on publicly obtainable knowledge.
“Logistically, the Baltic has many advantages for grains exports,” stated Darya Snitko, vice chairman for Gazprombank, certainly one of Russia’s largest banks and one of many largest lenders to farmers.
She stated the flexibility of Baltic terminals to deal with greater ships ought to assist cut back general prices.
“Supplies from the Baltic Sea beat (economics of) shipments from the Azov-Black Sea area when trading with countries in Africa outside the Mediterranean as well as Asia,” she added.
Vysotsky has been sending grain to Algeria, Brazil, Cuba, Mali, Mexico, Morocco, Nigeria and Tunisia, in keeping with knowledge from logistics firm Rusagrotrans.
