The New Overland Grain Corridor Group announced the largest contract in the history of China and Russia

It seems that Russian President Vladimir Putin has brought a new large raw materials contract from the Middle Kingdom.

During his visit to the summit of the “One Belt, One Road” project, the Russian company EPT announced agreements regarding the supply of Russian grain to China. We are talking about concluding a contract with the Chinese state corporation China Chengtong, a company that is part of the New Overland Grain Corridor group and owns 32 million hectares of arable land in Siberia and the Far East. The agreement provides for the export of 70 million tons of Russian agricultural crops to China over 12 years, writes Reuters, citing information from a company representative.

Karen Hovsepyan, head of the New Overland Grain Corridor, noted in a conversation with TASS that the contract was “one of the largest in the history of Russia and China”: the transaction amount will be 2.5 trillion rubles, or $25.7 billion. According to him, the agreements will be consolidated at the intergovernmental level during the prime minister’s visit to China -Minister of the Russian Federation Mikhail Mishustin, scheduled for late November-early December.

Until now, China has practically ignored Russian grain. Although the total import of wheat to China in January-April soared by 60%, to a record 6 million tons, products from Russia accounted for an insignificant 0.5%, or only 30 thousand tons. By the end of September, China had already purchased 3.2 million tons of grain from the Russian Federation, which, however, also amounts to only slightly more than 2% of the country’s annual imports, which last year reached almost 150 million tons.

The head of the SovEkon analytical center, Andrei Sizov, doubts that the “largest Russian-Chinese grain deal” is real. News about it comes only from Russia, there has been no confirmation from the Chinese side, and the rest of the world, apparently, is also “not in the know,” the expert points out.

If we assume that the supply statements are true, then, taking into account previous declarations of the New Overland Grain Corridor, it turns out that the company already has a total order portfolio for 170 million tons of grain, Sizov continues. “Such contracts do not exist in principle,” the expert notes; on the grain market, hundreds of thousands of tons are already a major transaction, and here we are talking about 4-5 annual volumes of all Russian exports (approximately 50-60 million tons per year).

How such exports to China will be ensured also remains unclear: the company has only a few silos on the border with a total storage capacity of 80 thousand tons.

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