Astra Alliance News

Online conference "Export to SMEs: The New Reality".

Media About us
On May 21, the online conference “Export to SMEs: the new reality” organized by Expert South think tank was held to define the current state of foreign markets and to look for development opportunities in the challenging environment. Agro Grain South (part of Astra Alliance group of companies) was a partner in organizing this conference. Akim Talibov, vice-president of Astra Alliance Group of Companies, was among the speakers at the event. To his opinion, agricultural products export can be divided into four blocks, “the first being grain crops export, the second – export of processed grain products, the third – oilseeds export, and the fourth – pulse crops export. The situation with grain is well-known: at the beginning of 2020, an export quota was defined, but it had been taken out by the beginning of May. This means that before July 2020 no grain will be exported from Russia. Now, because of this, there is a certain downtime of transshipment facilities, all export-oriented logistics is at a standstill. As to grain products and pulse crops, everything works properly, though with a specific character: a very high volatility. According to our observations, when the crisis first started, demand for such products was high. Then by the end of April we saw a sharp dip. There were two reasons: full warehouses and a drop in consumption. Prices for a range of processed grain products, including fodder, went down. In Turkey, for example, the government put pressure on meat producers not to allow them to raise prices. Consequently, feed manufacturers could no longer operate at high prices either. Finally, before coronavirus, sunflower export restrictions were imposed on oilseeds in Russia (it was necessary to provide raw material for domestic refineries), but sunflower oil rose well in price, and Russia started to supply to many countries”.
Besides, during the conference, Akim Talibov underlined that “the REC is always open and ready for communication. Every exporter can get the necessary support at the Center, but to ensure significant increase of companies’ export potential, the government needs to answer several questions. The first one being whether Russian enterprises have enough capacity to sharply increase their output. The second – to define what difficulties foreign competitors are having in their markets and in what sagging (overseas) areas and directions domestic producers and exporters could develop. The third question is set at whether demand has survived in those markets where Russian exporters had been successfully competing with their rivals before the pandemic. And the fourth one: whether the logistics infrastructure required to deliver products to foreign markets can sufficiently function. Coronavirus has had a significant impact on the global economy. Many industries have been affected, freight transport being one of them. If export-oriented companies get clear answers to these questions, we believe that the Russian Federation can show a good exports dynamic even in these difficult times”. At the end of the conference, exporters were optimistic about the future; they are trying out new niches and believe in increased state support. It was also noted that the current data from the International Monetary Fund allows for some important conclusions. “These figures show where the industries are falling through, where there are gaps that can be filled with goods supplied from Russia," Akim Talibov explains