According to Rosstat, in 2022, the grain harvest reached a record level. Rosselkhozbank experts named priority countries for export expansion.

The Middle East and Africa: growth potential

Official Rosstat data confirmed experts' estimates of the grain harvest for 2022. According to the agency, the volume of grain production last year amounted to 153.83 million tons in net weight, 104.44 million tons of which is wheat. Earlier, Boris Listov, Chairman of the Board of Rosselkhozbank, predicted a new record for this cereals category. The previous maximum value was recorded in 2017 and amounted to 86 million tons.

With high yields, we can speak about the need for further development of export relations, primarily with the Middle East region and African countries. Grain crops have been the basis of Russian exports in this area for many years. By the results of 2021, the Russian agro-industrial complex delivered wheat, barley, and other cereals to Saudi Arabia and Egypt in the amount exceeding $2 billion.

These data were presented at the All-Russian Grain Forum in 2022. Analysts of the leading bank of the agricultural sector noted an excellent potential for sales growth, especially in countries with a positive demographic trend and increased purchasing power among the population. In addition to Egypt and Saudi Arabia, experts bet on Ethiopia, Niger, Benin, Tanzania, Mozambique, and Turkey.

Developed sales channels in the Middle East and Africa, as well as effective mechanisms of support for the grain industry from Rosselkhozbank, are among the main drivers of increasing the number of FEA transactions.

Since the beginning of 2000, the financial organization has directed about 1.4 trillion rubles to grain production, storage, processing and warehousing. The amount accounts for about 13% of all loans granted to agricultural enterprises up to 2022.

More than 170 investment projects in the grain industry were implemented with the participation of the specialized banking structure all over the country.

Listov Boris: on a new tool of support for exporters

Russian agricultural producers receive support from RSHB when promoting themselves in foreign markets. The complex of measures consists of financial instruments and product solutions in the field of mutual settlements.

There is a vast network of correspondent banks all over the world, which allows conducting transactions, excluding risks of interaction with foreign financial institutions. This approach strengthens the position of Russian producers in foreign economic transactions. Specialists of the backbone bank of agrarians also provide expert support during the whole project cycle - from searching for priority export markets to implementing trade processes abroad.

During the Jubilee XXV St. Petersburg International Economic Forum, Boris Listov announced plans to bring a new tool for hedging Russian grain exporters' risks to the market. Rosselkhozbank, jointly with the United Grain, will assist farmers in developing modern exchange trade in commodity assets. It is primarily a question of grain shipments. Boris Pavlovich Listov, the Chairman of the Board of Rosselkhozbank, noted that agricultural producers could use the tool at the Moscow Exchange.

After signing a corresponding agreement, RSHB and UZK agreed to create an opportunity to hedge risks when selling grain on the exchange through a non-deliverable forward. Such a financial instrument has not previously been available to Russian agrarian enterprises.

The essence is to fix an acceptable price level for cereals at the time of the transaction and, consequently, avoid the negative impact on profits if the price changes in the future. Thus, producers can confidently predict the proceeds from selling exported goods.

Any change in the value of the underlying asset will not affect the financial results of the transaction participants, as the counterparties of the funds under the forward contract will compensate for the losses.

Cooperation between RSHB and UZK will help to create a benchmark for grain prices, which will make the interaction of the parties in the market more transparent. Consequently, one of the major problems of the industry associated with the high volatility of grain crops will be resolved.

The Main Agricultural Bank strives to create better conditions for developing export opportunities for the Russian agro-industrial complex. Applying a non-deliverable forward will allow the Russian agro-industry to maintain stability and strengthen the positions of national exporters on the international market.

Boris Pavlovich Listov: biographical information

Listov Boris was born in the Leningrad Region, Vsevolozhsk. He graduated from two universities - the FINEC and the Moscow State Law Academy. He has built a successful career in banking. Listov Boris Pavlovich is a candidate for Sciences (Ph.D.) in Economics. He served as a senator and was a member of several commissions and committees in the upper house of parliament.
Since 2018, Listov Boris has been the head of Rosselkhozbank.