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Deputy Director Of Rosselkhoznadzor Says Russian Trade Threatened By Logistical Shortfalls, Ruble Instability Featured

10 March 2016

During a roundtable meeting, Deputy Director of Russia's Veterinary and Phytosanitary Surveillance agency (Rosselkhoznadzor) Aleksey Alekseyenko said that the two main obstacles that prospective trade partners face are logistical issues in addition to the volatility of the ruble.

"If there is a possibility to develop combined efforts to build a common logistics scheme (with potential trade partners), it might dramatically reduce costs," Alekseyenko said. 

Similar trade problems exist with countries that have only just started exporting to Russia. Iran, for example, where a new logistics system is being constructed. Specialists think that the optimal route for Iranian suppliers is to create a scheme through the Caspian Sea. From the Caspian Sea, and then along the Volga, there is potential to ship a lot of products to central Russia with minimal losses and costs.

Alekseyenko also outlined another major factor in developing trade with other countries - the instability of the ruble.

"I will not talk about the reasons of such a situation, but the current course (of the ruble) does not clearly reflect the purchasing power of the ruble and it harms product supplies headed for the Russian market, favoring exports from Russia. Because of this, in negotiations with many partners, we discuss the possibility of calculating in national currency," he said.

This was an issue that was repeatedly discussed in Russian-Chinese and Russian-Iranian negotiations, Alekseyenko said. Officials of Russia's Ministry of Finance are working on creating a system, but this process will not happen quickly. One of the possible solutions is bartered supplies, which can be effectively carried out at the warehouses of various suppliers located in Russia. This type of cooperation could help alleviate many of the problems that are creating undesirable economic conditions for exports.

"This scheme allows for more rapid contact and faster calculations," Alekseyenko said.

Increasing trade turnover is one initiative alongside maintaining food quality and security, he added. One solution would be to introduce a voluntary certification process, of which interested companies will be able to take advantage. The process would be an analogue of the type of certifications issued for products that are considered "environmentally friendly" foods in other countries.

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