Farmbook Founder Borne Drecksler About the Russian Agricultural Market

Aug. 3, 2012 - PRLog -- The Russian agricultural market has a great potential expressed by its ability to satisfy not only its own needs in food products, but food demand in CIS countries, Middle East, China, and India. For instance, the Russian domestic market of pig and poultry production is already saturated, and its further development requires export implying competition with the American producers. However, this is something that the Russian companies are not yet ready for. So, Russia’s joining the WTO will create possibilities of further development of the pig production market segment, however, even now the Russian farmers have to upgrade their production facilities to be able to compete successfully in the international market as the foreign producers’ pork prices are 30-40% lower. As far as the Russian milk production market is concerned, it is not yet developed and strongly depends on the investments received by the industry through the agricultural business diversification.
Such agricultural products as silage, for instance, do not have their own distribution market in Russia, though in the European countries plant processing by-products are successfully used as livestock feed. Therefore, the cost of milk, say, in Germany, is half lower than in Russia.
And another peculiarity of the Russian agricultural market is that an average farmer has only a few alternatives for the distribution of its products: either agents requiring large discounts for bulk purchasing or someone among the farmer’s friends. Neither Russian nor international market has a consolidated data base on the producers and buyers. There is no segmented supply that could be shown on a map. Such an agricultural sales platform as Farmbook helps producers find buyers directly, bypassing agents, which is likely to decrease the share of agency transactions in the agricultural market in the nearest future. As a result, the food products markup should shrink to 10% (instead of the current 20-30%), and agents should be engaged mainly for logistics purposes.
At present, the most active agricultural regions are Central Russia, Krasnodar, Rostov, Tatarstan, Bashkiria, Northern Caucasus, and Moscow as one of the largest buyers. But even now the Russian producers can find export partners abroad via Farmbook, as at the beginning of this year the website was supplemented with English, Spanish, and German interface. Currently, the resource has over 17 thousand registered users. Farmbook is a free non-commercial platform helping to find a partner in a certain territory and industry, with all exchange and monetary relations between the producers and buyers taking place beyond the platform.