Russia is offering agricultural land to Southeast Asian nations to grow crops and help secure reliable food supplies, part of wider efforts to foster trade and investment ties in new markets.
“We suggested to companies in the region to enter the Russian market given its large scale and to establish themselves to produce food for their own supply,” Deputy Economy Minister Andrei Slepnev said in an interview in Manado, Indonesia, where he attended a meeting of the Association of Southeast Asian Nations (Asean) trade ministers.
Russian President Dmitry Medvedev was turning to Asia to boost exports as his country’s economy struggled to grow at the pace it did before a 2009 recession.
Russia was targeting grain buyers in Southeast Asia to regain its share of the world market after lifting an export ban in July, the Moscow-based Institute for Agricultural Market Studies said this month.
“Many Asian governments are exploring alternatives to secure food supplies over the long term given that the demographic and environmental pressures in Asia could lead to structural food shortages in the years to come,” said Frederic Neumann, co-head of Asian economic research at HSBC in Hong Kong.
“In fact, it’s already showing up in greater inflation pressures in the agricultural sectors in the region.” Asian nations were seeking stable food supplies after data compiled by the United Nations Food and Agriculture Organisation showed global prices surged to a record this year.
India’s food inflation accelerated to a three-month high, a report showed this week.
Indonesia, the world’s thirdlargest rice consumer, may seek to negotiate an agreement with India and Pakistan to secure rice supplies, the Southeast Asian nation’s Trade Minister Mari Pangestu said in a separate interview this week.
Food prices would remain higher in the next decade than in the past 10 years as agricultural production slowed and demand increased, the Organisation for Economic Cooperation and Development and the United Nations said in a joint report in June.
Russia, the world’s largest energy exporter, was exploring possible investments with Southeast Asian nations in power generation, alternative energy and natural-resources exploration as it sought to boost demand for the commodities it produced, Slepnev said. — Washington Post – Bloomberg