Strategic turn of Russian business to the East: how domestic companies go to China, the United Arab Emirates, Turkey and other markets

The Ministry of Industry and Trade is preparing to reconsider the issue of introducing quotas for the import of plant protection products (PPPs) at a subcommittee of the Ministry of Economic Development, the department told RG. Quotas may be introduced from the beginning of 2024 until the end of the season (June 30), market participants said. Domestic producers assure that they are ready to more than cover the under-imported volume.

According to RG, the quota parameters have already been approved - it will be allowed to import 15 thousand tons of the main groups of pesticides. But the date for introducing the quota is still being discussed: if previously it was about the period from October 1, 2023 to April 30, 2024, now the deadlines have been shifted to January 1 to June 30, 2024.

Deputy Director of the Russian Union of Plant Protection Chemical Manufacturers Viktor Grigoriev says that 15 thousand tons for six months is only half as much as was imported into Russia without quotas. About 220 thousand tons are consumed in the country, and the share of imports is no more than 30%. At the same time, the expert is convinced that domestic producers are ready to fully satisfy the needs of the domestic market even now: the capacity is designed to produce 380 thousand tons of plant protection products. Quotas will make it possible to load empty capacities, stimulate the opening of new production facilities, localize the production of active substances and increase the export of Russian plant protection products.

But not everyone shares this optimism. Chairman of the Board of the Union of Grain Exporters Eduard Zernin says that he does not understand the motives for imposing quotas on the import of plant protection products. “If in the case of seeds we are actually talking about the creation of a new, investment-intensive industry, then in the case of the production of plant protection products, not a single new investment project has been announced. Just as there is no real import substitution. Almost all active ingredients are produced abroad. Russian manufacturers simply mix imported starting active ingredients and sell the result as a domestic product. They do this well without restricting competition, their market share is growing steadily, as is the profit, which they actively invest not in import substitution, but in the purchase of non-core assets for them, such as agricultural land," - Zernin comments. In his opinion, the agricultural producer whose cost of production will continue to grow will be the extreme one in this situation.

Russian newspaper

The restriction on fuel exports is indefinite, but depends on market saturation and the results of applying this instrument. This was announced on Thursday, September 21, by First Deputy Head of the Russian Ministry of Energy Pavel Sorokin. His statement was published on the ministry’s Telegram channel.

“This measure should have an effect very quickly, because leaching will stop, because a fairly significant volume was bought by unscrupulous market participants on the stock exchange or at oil depots and then exported. Now there is no such possibility. This measure just covers everything,” he said.

This decision, he said, will allow saturating the stock exchange and the domestic market and closing the shortage, including among farmers.

“Farmers are one of the largest consumers of diesel fuel, and this measure will fully satisfy the needs of our agricultural producers,” he said.

The ministry expects that the volumes now sent to the market will completely cover all needs and even create a surplus of fuel on the market.

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The regional governor said this at the plenary session of the VI Business Forum “Days of International Business in the Ryazan Region”.

The session discussed the development of exports in new conditions, building new logistics routes, supporting businesses when entering foreign markets and increasing the competitiveness of domestic producers.

Governor Pavel Malkov noted that International Business Days are the main business event of the year in the Ryazan region.

“The economy is adapting and continues to grow under conditions of restrictions. Everyone understands that new challenges also mean new opportunities. We are using them to the maximum. We are increasing business ties and cooperation with friendly countries,” the government press service reports Malkov’s words.

The head of the region noted that Ryazan products are supplied to more than 100 countries:

“We actively use the opportunities of international contacts and electronic marketplaces. For the Ryazan region, supporting exports is one of the priorities.”

The forum will host strategic sessions, business negotiations, an exchange of contacts, and foreign participants will visit Ryazan enterprises.

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Despite increasing economic pressure, enterprises in the Southern Urals continue to supply their products to every second country in the world. Since the beginning of the year, the number of export-oriented companies has grown by 161 and exceeded 2.5 thousand, Governor Alexey Teksler noted at the award ceremony for the winners of the All-Russian competition “Exporter of the Year” in the Urals Federal District. Moreover, this is facilitated not only by the convenient location of the region, but also by the situation itself, which forces businesses to look for new partners and markets.

- Today, the most important export directions are developing through Kazakhstan, Turkmenistan, China and Iran to India with subsequent access to the World Ocean. In economic terms, these regions are more attractive than Europe, where there is currently a recession and inflation is quite high. We need to further strengthen cooperation with countries in Asia, Africa, and Latin America. And South Ural companies are already supplying products and technologies there. For example, recently a batch of fire trucks produced at the Ural automobile plant in Miass was sent to Cuba,” said Governor Alexey Teksler.

It is worth noting that for the majority of Chelyabinsk enterprises, the main directions of foreign economic activity have traditionally remained the friendly states of the south-eastern region. Exports to Europe did not exceed 20 percent in the best years. Therefore, the authorities attach key importance to the development of the eastern branch of the North-South transport corridor.

Until recently, exporters used the western branch - the sea route through the Caspian Sea. With the opening of the Yuzhnouralsky transport and logistics center, an alternative appeared - cargo delivery by rail. As Valery Denisenko, director of the Chelyabinsk Region International Cooperation Agency, explained, container trains are already departing along the new route. Their launch was preceded by global work: coordination of their passage with the Kazakh and Turkmen sides, allocation of quotas for the rapid movement of goods, in which the government and the governor of the Chelyabinsk region took part. The development of this direction in the future is associated not only with Ural products, but also with popular exports from the regions of Siberia and the Far East.

The dry port's congestion is increasing. Two weeks ago, as part of the agreement that the regional government signed with FESCO at the St. Petersburg International Economic Forum, the first Chelyabinsk shuttle was launched to Vladivostok. It directly connected the Yuzhnouralsky TLC with the Vladivostok sea trade port. It is important that customs clearance of goods will take place directly in the Chelyabinsk region, so that they can then continue non-stop along the sea route to China and Korea.

A unified development institute has been formed in the region, providing companies with up to 70 different services in promoting products to foreign markets

According to the authorities, the development of transport corridors is a good incentive for the growth of foreign trade activity. In turn, a unified development institute has been formed in the region, providing export-oriented companies with up to 70 different services in promoting products to foreign markets. Starting from the acceleration of newcomers to the organization of exhibition activities, assistance in entering foreign marketplaces, translating websites, catalogs, booklets, searching for potential buyers abroad and delivering goods to the borders of the Russian Federation. During business missions, promotion problems are resolved at the government level, which makes it possible to remove administrative barriers. For example, a well-known South Ural cereal manufacturer began supplying its products to a large retail chain of Uzbekistan exclusively through the mediation of the authorities - after negotiations organized during a visit to the country by a delegation from the Chelyabinsk region.

“Since last year, with the support of the governor, another powerful promotion tool has been launched - regional exhibition pavilions in the countries of presence,” adds Valery Denisenko. - One of them now works in Minsk, where the region is represented by 26 enterprises, the other in Tashkent - with expositions of 16 companies. For three months, each of them receives exhibition space, promotion on the Internet and in the media, marketing, assistance in negotiations, trips to exhibitions in the country and contract support. All expenses are covered by the budget. Participants only need to submit samples of their products.

Export works not only for recognition and promotion of the region, but also brings tangible returns: every ruble of state support helps Chelyabinsk business earn up to 84 rubles, of which seven are returned to the treasury as taxes. For the budget this is an effective investment of funds, for enterprises it is an opportunity to develop production and create new jobs.

And, although the structure of exports in the industrial region has remained virtually unchanged over the years - 86 percent of supplies are metal and metal products, the number of participants in foreign economic activity is growing due to hundreds of small and medium-sized enterprises sending their own high-value products to foreign markets. Today, no less attention is paid to promoting the products of the agro-industrial complex, mechanical engineering and other knowledge-intensive industries.

It is no coincidence that among the winners of this year were such well-known enterprises in Chelyabinsk as the Ural Metallurgical Company, which exports its universal packaging tape to almost all continents, and the small enterprise "Ura Confectioners" (IP Timur Valeev), which sells sweets to 18 countries of the world. They prove by their example that any quality product can be supplied abroad.

“Next year, assistance to exporters will only increase, so I set all our enterprises the task of conquering new markets, and we will help them with this,” promised Alexey Teksler. - This is very important: export is not only a serious contribution to economic development, but also one of the main indicators of business success.

Russian newspaper

The Central Bank considers the increase in import duties to be a pro-inflationary factor, as it increases the prices of goods for consumers and companies that purchase imported equipment, materials and components

The press service of the Central Bank denied reports that the chairman of the bank, Elvira Nabiullina, suggested that in order to cool down demand for imports, think about raising import duties.

“This information is not true. On the contrary, the Bank of Russia believes that the increase in import duties is generally a pro-inflationary factor, as it increases the prices of goods for consumers and companies that purchase imported equipment, materials and components. An increase in prices for imported goods may also lead to an increase in prices for analogue goods that are produced domestically, ”the regulator’s press service told RBC.

The fact that the chairman of the Central Bank voiced such a proposal at a meeting of President Vladimir Putin with members of the government was previously reported by the Vedomosti newspaper.

The publication also reported that the government refused to return to the practice of strict foreign exchange control with the obligatory sale of a certain share of foreign exchange earnings by exporters. Instead, officials reached an informal agreement with entrepreneurs that they would sell more currency themselves.

The Financial Times wrote that the meeting considered proposals from the Ministry of Finance to oblige exporters to sell up to 80% of foreign exchange earnings within 90 days after receiving it, and to refuse state subsidies to companies that refuse to comply with these requirements. The fact that the authorities are discussing the possibility of returning part of the currency control measures to stabilize the situation with the ruble exchange rate was also reported by Bloomberg and Interfax.

According to Vedomosti, the government has been discussing the situation with major companies over the past two days, pointing out the "unacceptability of non-return of export earnings" to Russia.

RBC

/TASS/. India is negotiating with Russia to import a large batch of wheat to reduce its prices on the domestic market. Sources told the Economic Times.

"The government is exploring the possibility of importing wheat from Russia through private trade channels or through an intergovernmental deal. The decision will be made carefully," one of the sources said.

While India needs 3 million to 4 million metric tons of grain to cover the wheat market shortage, New Delhi may consider importing 8-9 million tons of Russian wheat to have a greater impact on price reduction, another source said.

According to Economic Times sources, the decision to buy Russian grain may be made in a few weeks. The plan of the Indian Cabinet to import wheat is seen as one of the possible measures to curb food inflation.

The last time India imported significant volumes of wheat was in 2017, purchases amounted to 5.3 million tons.

Rising wheat prices in India

Wholesale wheat prices in the country rose by about 10% to a seven-month high in August due to limited supplies. As of August 1, India's state-owned wheat reserves stood at 28.3 million tons, 20% below the 10-year average.

The increase in wheat prices was also caused by the introduction by the government this year, for the first time since 2008, of restrictions on the amount of wheat that producers and suppliers are allowed to keep in stock for wholesale and retail sales. According to the Ministry of Consumer Affairs of India, the authorities of the republic took such a step to ensure food security, stabilize prices, fight inflation and speculation.

India is one of the world leaders in the production of milk and meat, cereals and legumes. At the same time, the country is the world's largest importer of vegetable oils and is among the top buyers of beans and lentils. In 2022, the volume of agricultural imports of the republic amounted to a record $34.1 billion. Russia ranked 8th among suppliers of agricultural products.