A new opening in Russian seafood and soy supply lines into China appears to be an outcome of the Sino-U.S. trade war.
Major deals signed in conjunction with the latest annual roundtable of Chinese and Russian agricultural officials will result in a large increase in volumes of soy produced in Russia for consumption in China, potentially taking market share from U.S. supply. The event focused on the development of Russia’s Far East with Chinese investment, technology, and consumption power.
The “China-Russia Agricultural Industry Local Cooperation Long Term Development Roundtable’ met in Yekaterinburg and featured a line-up of senior Chinese officials, including the governor of Heilongjiang Province, which borders Russia.
Russia wants to radically increase its agricultural and seafood exports to China, to USD 9.5 billion (EUR 8.2 billion) in 2024, up by more than 100 percent on current figures, and supplanting the U.S. as a leading supplier of agricultural and fishery products in the process. For their part, Chinese firms are being drawn in by cheap Russian land and fuel costs – farmland rental and purchase costs are up 500 percent lower than China, while both wages and fuel costs are also significantly lower.
Also at the conference, the Harbin Dong Jin Group signed a memorandum of understanding with Russia Far East Investment and Development Bureau for 100,000 hectares for planting oilseeds and grain crops.
Separately, Chinese firm Suifenhe Bao Guo Trade Ltd signed a deal with Russia-based Primorsky Krai Elena Co for 40,000 tons of corn and 20,000 tons of soy.
Another key Chinese player becoming more involved in Russia, the Harbin Dong Jin Group, a sprawling industrial conglomerate, has been investing in Russia through its Ou Ya Agriculture Development Group, which has sown over 50,000 hectares of soybeans in the Khabarovsk region of Siberia. Aside from planting soy fields, Dong Jin Group has planned a China-Russia cross-border USD 107 million (EUR 92.3 million) “agricultural industrial chain,” with a demonstration soy farm in Russia and a soybean processing plant and river port on the border in Fuyuan connecting Khabarovsk to Heilongjiang.
Meanwhile, Russia-focused trading house Heilongjiang E You Gou Trade and Commerce Co., which is based in northern China, wants to open a store featuring 5,000 food and drink products from Russia, according to CEO Chang Li Wei. Chang said he sees a “great opportunity” in importing Russian foodstuffs – including fresh and canned fish and crabs – into northern Chinese retail markets.
