Russia eyes eastern trade routes

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Published: November 16, 2023

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Reuters – Russian President Vladimir Putin called for the development of wheat and fertilizer cargo transport routes in Asia during a visit to Kazakhstan Nov. 9 as Moscow looks for export routes due to Western sanctions. 

Chairing a conference on agricultural co-operation with Kazakh President Kassym-Jomart Tokayev, Putin said Russia would have about 60 million tonnes of exportable wheat from this year’s crop. 

“We are confident, certainly, that we will retain the No. 1 spot globally in terms of exports of this important commodity, wheat,” Putin said. 

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He called for further development of shipping routes to large Asian markets such as China and India. 

Western sanctions on Russian banks and companies have made it more difficult for Russian exporters to ship grains and arrange payments, although the sanctions do not specifically target such commodities. 

Moscow has also reportedly asked exporters to adopt a minimum wheat export price to protect farmer income, though the functioning of the semi-official scheme is unclear. 

Kazakhstan, in turn, is seeking to become a logistics hub for Russian commodities bound for China and Iran, officials say. The country already operates a railroad link between Russia and China and has a railroad connection with Iran along the Caspian Sea. 

Kazakhstan’s Tokayev has carefully maintained neutrality in the Russia-West standoff, and welcomed Putin just a week after hosting French President Emmanuel Macron. A United States delegation led by a senior State Department official also visited in early November. 

Kazakhstan has already taken advantage of the abundance of Russian natural gas, which Europe has largely stopped buying. Together with Uzbekistan, it has started buying it for domestic needs while preparing to ramp up its own gas exports to China. Some officials say it could adopt a similar strategy of “sanctions” arbitrage with wheat and other Russian exports.

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