Russian agriculture continues to surge with the grain harvest expected to hit a post-Soviet record of 109 million metric tonnes this year. This comes on top of a general surge in agricultural output of 3% over the previous year.
The record grain harvest is in part the result of favourable weather conditions this year. However there does seem to be a steady improvement in farming conditions, with more land being brought into cultivation and Russia growing and harvesting its crop more efficiently.
Russia’s grain harvest is likely to mean that Russia will retain its leading position as the world’s foremost wheat exporter this year. With Russia apparently struggling to find storage space for all the grain it is harvesting the high grain crop should also continue to put downward pressure on food prices and thus on inflation.
As it happens – and as was widely predicted – Russia has experienced deflation or zero price growth for four consecutive weeks this summer, though this last week inflation resumed the standard 0.1% weekly growth rate it has followed for most of the year.
It is not all unalloyed good news. Though the grain harvest is expected to be large, it will be of lower quality than in the immediately preceding years. That is however a problem the Russians can live with.
Overall the turnaround in the Russian agricultural sector since its collapse in the 1990s has been sustained and impressive, with Russian farmers benefiting from the import ban on EU food imports and the lower rouble. The Russians plan to be fully sufficient in food in 10 years and for the moment they seem to be on course to achieve this.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of The Duran.