7 months ago
90
By Olga Popova and Gleb Stolyarov
MOSCOW (Reuters) - Russia, the world's leading wheat exporter, is expanding its Baltic Sea ports as it aims to boost agricultural exports by 50% by 2030 while reducing dependence on traditional Black Sea routes, officials and executives said.
The country, which exported at least 72 million metric tons of grain in the 2023/24 season, is looking at new markets in Latin America and Africa to diversify from its traditional grain markets in North Africa and the Middle East.
It has relied on its Black Sea ports to handle booming agricultural exports for the past decades but the conflict with Ukraine has made the area risky for shipping with both sides regularly striking each other’s facilities 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 several Black Sea terminals, told an industry gathering in Sochi in southern Russia.
In the last 18 months, Russia has launched two major ports, Vysotsky and Lugaport, in the Gulf of Finland, not far from St. Petersburg, President Vladimir Putin's hometown.
Vysotsky shipped its first grain in April 2023, while Lugaport began operations in June this year and capacity is expected to reach 7 million tons by early 2025, according to its owner Novaport.
Dmitry Rylko from the IKAR agricultural consultancy said the two ports will be able to handle up to 15 million tons of agricultural exports, including grain, per year.
That would account for a quarter of Russia's 60 million tons of grain exports forecast for the 2024/25 season.
Private firm Primorsky UPK is also planning a grain terminal at Primorsky port with capacity of up to 5 million tons.
EXPORT CONSTRAINTS
Putin set out a goal to increase agricultural exports by 50% by 2030 as part of a strategy to cement the country’s position as an agriculture superpower along with Brazil, the United States and China.
Russia has become the world's biggest exporter of wheat, corn, barley, and peas in the last decade, but further growth could be constrained by shipping capacity bottlenecks.
Many Russian ports announced plans to boost capacity after record harvests in the last two years. The Baltic Sea terminals are expected to expand at a faster rate.
"The expansion of the Baltic Sea terminals' capacity is a question of economic and transport security and sovereignty," Novotrans said in an emailed comment.
