Moscow and Beijing have recently signed a significant deal to ensure long-term supplies of Russian grain to China. The contract, worth 2.5 trillion rubles ($25.7 billion), is one of the largest ever deals between the two countries and is part of the New Land Grain Corridor (NLGC) initiative.
Karen Ovsepian, the deputy CEO for development at NLGC, revealed the details of the deal on the sidelines of the international Belt and Road Forum in Beijing. According to Ovsepian, the 12-year agreement will see China receive 70 million tons of Russian grain, soybeans, and oilseed cargoes.
The NLGC program, led by a company of the same name, aims to expand grain exports from the Urals, Siberia, and the Russian Far East to China, Central Asia, and the Middle East. The initiative is supported by the Russian and Chinese governments as part of the Eurasian Economic Union and the Silk Road Economic Belt.
To develop the NLGC export infrastructure, Russia has built the Zabaikalsky grain terminal on the border with China, as well as a network of grain elevators across Siberia, the Urals, and the Russian Far East. The Zabaikalsky terminal, which launched in September, is the largest grain logistics facility in Russia and the first of its kind globally. Private funds have financed the facility, with a total investment estimated at 9 billion rubles ($92.5 million).
Ovsepian emphasized that the grain supply agreement would play a crucial role in balancing the export structure within the Belt and Road Initiative. He stated that it would “by far replace the lost volumes of Ukrainian exports” with produce from Siberia and the Russian Far East. This demonstrates the potential for Russia to become a leading player in the global grain market, meeting China’s growing appetite for agricultural products.
The NLGC’s efforts to strengthen export links between Russia and China align with both countries’ strategic objectives. By expanding their trade partnerships, Moscow and Beijing aim to enhance their economic growth and regional cooperation. The NLGC initiative is seen as a significant step towards achieving these goals.
The signing of this major deal represents a victory for the NLGC and a milestone in the relationship between Russia and China. Through the exchange of grain and other agricultural produce, the two countries are deepening their economic ties and reinforcing their shared interests. Furthermore, the agreement will bring stability and security to China’s food supply chain, ensuring a steady and reliable source of high-quality Russian grain.
Overall, the NLGC’s ambitious vision of establishing new export routes for Russia’s agricultural produce is taking shape with the signing of this groundbreaking deal. With the implementation of the NLGC program and the development of export infrastructure, it is expected that Russia will be able to meet China’s ever-increasing demand for grain, while creating significant economic opportunities for both nations.
As this partnership unfolds, it will be interesting to observe the impact it has on the global grain market and the broader geopolitical dynamics between Russia, China, and other key agricultural players. By leveraging their respective strengths and resources, Moscow and Beijing are proving the potential for fruitful cooperation in the field of agriculture and beyond.