Russia Signals Caution in Food Exports Amid Global Pressures
At a meeting on April 5 organized by President Vladimir Putin to support the agro-industrial sector, Russia indicated it will tread carefully with food exports. Putin asserted that Russia can offer lower domestic prices for key products than those found on the world market.
He emphasized the need to accelerate agricultural growth to more than 3 percent annually, describing these targets as realistic and reasonable benchmarks.
The outlook may darken
Over the past two years, global food markets have grown more complex. For years, policy missteps in the economy, energy, and food sectors among developed nations have driven a sharp rise in world food prices. This assessment was noted by the news agency TASS. In recent weeks, the situation has deteriorated further as new sanctions have tightened fertilizer supplies from Russia and Belarus, with Western production also pressured by high gas costs.
Looking ahead, the global situation could worsen due to fertilizer shortages and efforts by developed economies to secure food flows. Such moves could aggravate shortages in the poorest regions. Putin warned that new waves of migration and higher world food prices could follow from these dynamics.
Domestic market focus
Putin highlighted the need for prudence in abroad food imports amid global shortages. He urged careful monitoring of export volumes to countries that pose open hostility toward Russia.
He argued that Russia remains resilient: the domestic market for major food groups is fully covered by national production, and the capacities of local producers for certain goods such as sunflower oil and grain exceed domestic demand.
Increased production volumes would help keep Russian food prices below global levels, according to Putin. He also stressed that the agricultural sector must minimize negative externalities for Russians while expanding the supply of high-quality, affordable products as a central task for the year 2022.
From field to fork
The president drew attention to reducing reliance on foreign inputs across the entire supply chain. This includes imported seeds, cultivation products, vitamins and feed additives, and plant protection products.
Clear rules for import substitution should be established and followed in the near future, he said. Putin also called for close monitoring of fertilizer availability, insisting that the needs of domestic farmers take priority.
The system should ensure a reliable fertilizer supply for agricultural producers. He urged the Ministry of Industry and Trade and the entire government to monitor the situation with diligence, placing farmers first.
Fertilizer shortages
Putin noted that global fertilizer supplies are tight, and Russian fertilizers are likely to be redirected abroad. He stressed that the aim is not to harm anyone but to handle logistics and insurance matters carefully.
He described the current fertilizer deficit as a pressing issue, signaling that discussions would continue within the Ministry of Agriculture and relevant authorities. The plan included preserving the existing regime through interstate agreements while keeping export licenses on hold for the time being. However, he suggested that this approach could be revisited later and not be set in stone.
Nationalizing energy assets
On energy policy, Putin indicated that the sector is experiencing some deterioration in certain European countries due to non-market measures and administrative pressure on Gazprom. He argued that Western partners are attempting to shift economic and energy problems onto Russia and resolve their own challenges at Russia’s expense.
Putin touched on calls from Western officials to nationalize Russian energy assets abroad. He warned that such moves would be a double-edged weapon and cautioned against underestimating the consequences.
Food spending in Russia
Against this backdrop, consumer spending in Russia showed signs of easing, according to a Romir study. For the week of March 28 to April 3, the expenditure index stood at 5,119 rubles, down 4.6 percent from the previous week. Year over year, the figure was 3.7 percent higher than the same period in 2021. The twelve-month average hovered around 5,293 rubles, roughly 3.3 percent below the holding’s data.
The weekly average receipt fell by about 2.4 percent to 643 rubles per purchase, with year-over-year growth of 7.5 percent. The twelve-month average for a single purchase registered 655 rubles, about 1.8 percent lower than the prior period.