Foreign Investment in Russia’s Agriculture Dropped by 30% in 2017: Report

Russia’s agriculture industry has seen a decrease in investment by foreign companies in 2017, compared to the previous year, research from professional services firm EY published at St. Petersburg International Economic Forum reveals.

According to Forbes Russia, the report said that last year, for the first time ever, China became the biggest overall foreign investor in the Russian economy. In previous years, most foreign direct investments (FDIs) were coming from either U.S. or Germany companies.

China boosted its investment in Russia by 3.5 times in 2017, compared to the previous year, EY estimated. However, it did not provide specific data to back up this research. Similar information had been released earlier by the Russian Central Bank.

Over the first three quarters of 2017, foreign investment in Russian agriculture amounted to $235 million, a drop of $95m or 30% on the same comparable period in the previous year, it said. Foreign investment in Russian agriculture has dropped nearly threefold since its peak of around $900m in 2013, the Central Bank estimated.

International food companies are still interested in starting new projects in Russia, but the attractiveness of investing is hampered somewhat by geopolitical risks, said Daria Snitko, an analyst with Russia’s Gazprombank.

Several major foreign companies are continuing to strengthen their positions in Russia, including Louis Dreyfus, Cargill, CP Foods and NCH Capital, she added.

Foreign investment in Russia’s meat industry has reduced substantially, although this trend is primarily associated with the saturation seen on the domestic meat market, Sergey Yushin, chairman of Russia’s National Meat Association told GlobalMeatNews. The Association believes the flow of investment into Russia from overseas could start growing again in future, given the Russian meat industry’s strong export potential, Yushin stressed.