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You can not eat enough shrimps
Do we need food from Asia?
The volumes of Chinese production, especially in recent years, continue to amaze the whole world. The ability to keep the amount of food on the shelves at the same level due to imports from China is great. To begin with, we note that at the moment Russia is not included in the top ten of the main trade partners of the People's Republic of China in terms of exports, while being in the top ten of the partner countries in terms of the total volume of foreign trade. This means that there are many opportunities for extensive development (along with intensive development, which implies an expansion of the list of names of goods and products imported to Russia) from China, including infrastructure and logistics. Realization of these opportunities can lead to a serious increase in mutual investment, primarily from the Chinese side. In the long term, this could become a platform for even closer cooperation with the PRC, especially against the backdrop of deteriorating relations with the West. One of the catalysts for this process could be the agreement on gas supplies to China signed in May. Another circumstance that makes such a scenario possible is the recent decision of the BRICS countries to establish a Development Bank.
As for the specific types of products that China can supply to Russia, the spectrum is quite large. Starting with all sorts of meat, including pork and poultry, and ending with fish and seafood. This also includes fruits and vegetables, the volume of which, by Chinese standards, is small, but quite sufficient for the Far East.
The obvious advantage of the Chinese alternative is comparative cheapness with a wide variety and an unlimited amount that allows you to quickly close many of the gaps that have appeared on the market. However, the medal has a downside. The quality of the products and its environmental cleanliness raise big questions. About taste the conversation is separate, the products grown on chemicals for their taste qualities can not compete with European and Russian goods.
In this case, the situation is far from being as promising and promising as it is for China. In the structure of Indonesia's exports, food products occupy a very modest place (1,5%), and much more interesting from the investment point of view is the mining industry (in which the Russian business has already invested its capital).
The export of products for Vietnam, as for Indonesia, is also a modest income item - the same 1,5%. Therefore, again, expect some explosion in the supply is not worth it. However, part of the needs of the Russian market can be provided by Vietnamese seafood and fish (relatively cheap by world standards, excluding transportation costs), as well as cashew and Brazil nuts, for which Vietnam ranks first in the world, 24% of world exports .
The export potential of the Indian side across the country is small, but due to the total volumes it is still higher than that of the named Indonesia and Vietnam. Of the annual volumes of approximately 2,1 billion dollars, a significant part consists of frozen beef, clams and crustaceans, nuts (Brazilian and cashews) and frozen fish, which are very popular in Russia. However, there are no established relations between countries in this area, and the expansion of supplies seems to be problematic.
Investment or import?
Refusing European and American supplies, Russia primarily relies on its own import substitution and development of the food industry. In accordance with the new Doctrine of Food Security, Russia needs to reduce dependence on foreign supplies and establish production of its own products. In this context, the inability to replace a number of goods looks quite logical, otherwise domestic producers will again face cheap competitors.
The second problem that is worth dwelling on is the sharp rise in the cost of products if they are transported from the countries of South and Southeast Asia and Latin America. The price, of course, will hit the consumer’s pocket, which will cause a negative reaction among the population. That is why the government is trying its best to keep prices down. Another important point is logistics. Delivering products from afar is very problematic, and in the case of perishable goods, it is completely impossible.
In other words, to assert that the export of food from Asia will expand dramatically, it is impossible. The countries of the Asia-Pacific Region, primarily China and India - Russia's “colleagues” on BRICS, have really impressive resources. Another question is how to stimulate their use in order to expand food imports to Russia. The diversity and competitive environment in the market would benefit all economic actors, but there is no guarantee that China, India and other countries will want to expand supplies in the quantities that are desirable.