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Leu-AGRO News Update on Russian Agriculture, Martin Leu gave an interview to the German Newspaper “Wirtschafts Woche”.
Recently, Martin Leu, founder and CEO of Leu-AGRO Group Switzerland and Volga Baikal AGRO LLC., its subsidiary in the Russian Federation, gave an interview to the German Newspaper “Wirtschafts Woche”.
Martin Leu has got decades of experience as an agricultural manager in Canada and Russia. Now, Martin along with a team of international Agriculture Specialists, tries driving forward his own projects in the largest country in the world.
Martin shared his point of view on the Russian Agriculture and actual situation in the segment of the wheat export.
Martin Leu:
«Agriculture in Russia has always been a difficult profession:
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capricious weather conditions can severely affect the harvest.
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finding attractive financing for projects is a difficult task.
But the last year was better than it has been in a long time. Such a large grain harvest of such good quality as last autumn is rare in the life of a farmer. It would seem we can celebrate success. But! Instead of being happy about the prosperity of the industry, I am currently primarily shaking my head when I look at the latest Agriculture Trade News in Russia.
The overwhelming majority of farmers and investors in Russia who are currently perplexed with the decisions of the Government in Moscow regards this Trade issues.
For weeks Moscow has been trying to put a stop to agricultural exports with horrific export tariffs. And this even though production in Russia is increasing while grain prices have been on the rise worldwide for months. It is quite difficult to explain all that to investors. Additionally, to say, in March, they introduced extra export taxes on corn and barley as well.
In fact, at first glance, the situation seems paradoxical. For years, agriculture has been one of the preferable branches of Business Development. It looks like Russia’s government forged plans to expand its own agricultural exports and protected domestic manufacturers through import bans, invested in export infrastructure, provided subsidies, and successfully negotiated with potential buyer countries to give Russian companies access to the world market. All this gave positive results: in the past few years, Russia has become the world’s largest wheat exporter. In 2020, for the first time in recent history, the country sold in excess of 26 billion euros more agricultural goods abroad than it had imported.
And, suddenly, all these measures: grain export is limited up to 17.5 million tons from February to the end of the Crop Year 20/21. The export tariffs on wheat is gradually increased up to 50 euros per ton, which corresponds to around 20 % of the current world market price. The final shot is a wheat export tax planned for June at the rate of 70 % of the export price from an exemption of 200 US dollars per ton. According to D. Patrushev, Minister of the RF Agriculture, all this is done to protect domestic use and prices to keep food prices in the country under control. But in my opinion, this will damage the entire industry. After all, the problem is not high grain prices, but a weak ruble.
We are still positive on the long-term outcome and potential of Russian Agriculture and keep moving forward as planned».
You can read the full text of the interview here: www.wiwo.de
With best regards,
Martin Leu, Founder and CEO of Leu – AGRO Group Switzerland and Volga Baikal AGRO LLC
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