In March Russia plans to dispatch its first ever container train with food export traveling from the European part of Russia to China. This is seen as an attempt to both expand the export of Russian agricultural products and to find a solution for the problem of container load on their return from China where they travel empty.
Government’s export development project to start with China as pilot route
China’s market offers a vast potential. The test shipment to China is part of the government’s ambitious export development project, the scope of which is by no means limited to foodstuffs,” Grigory Mikryukov, expert with the Analytical Centre, told in an interview to “Kommersant Ъ” correspondent. “One of the priorities is food export: for example, in 2016, China’s import of meat products from Russia has grown 1.5 times in money terms, while the growth for fish products was 9.4%. Russia is vigorously expanding its agricultural export potential (whereas the total export figures for 2016 had dropped by 17%, the growth in agricultural export reached 5.2%),” Mr. Mikryukov explained.
Many kinds of products, particularly foodstuffs, require prompt delivery and fixed temperatures,” says Mr. Mikryukov. “Sea transportation is usually cheaper, but may take up to 1.5-2 months. Rail transportation is a much quicker option, which takes only a week to get goods from the Central Federal District to the frontier,” he explained.
The government is currently working hard to identify and eliminate administrative, technical and any other barriers impeding the expansion of non-resource exports, with China becoming a pilot route. Exporter surveys show that one of the key barriers when it comes to entering new markets is related to logistics. The role of this pilot shipment is to identify problems that Russian producers encounter when exporting their products, at least, in the case of China. The second goal is to launch an active rail route from Central Russia into China. The project is expected to result in a series of measures aimed at eliminating the key barriers that exist now, which shall in the end lead to a rise in Russia’s export to China. Quite a few restrictions faced by exporters were identified as early as during the preparation, settlements and negotiations with the process participants. Like, for example, the current tariffs rates on this route. And so this becomes a kind of vicious cycle: export is both complex and expensive because the amounts are not sufficient, and the amounts are low precisely because this export option is complex and expensive. There are, moreover, certain restrictions imposed by China itself. This export development project is an attempt by the government to find a solution here.