Miller Magazine Issue 108 / December 2018

68 MILLER / DECEMBER 2018 INTERVIEW Traditionally, Russia is one of the prominent grain expor- ters. However, the flour export is less developed compared to the grain export. In the world, Russia’s share is twenty per- cent in the wheat export, but its share does not exceed 1-2 percent in the flour export. Together with increased production, Russia has been trying to increase its wheat export and find new mar- kets. Do you think Russian grain export could be further increased? We think that Russia should increase its exports in products with a high level of processing like flour, grain, and feed. There has been a significant modernization of Rus- sia’s grain supply chain. Private and state-owned companies in recent years have modernized grain ter- minals. Is there a same modernization trend in Rus- sian flour milling industry? Could you tell us invest- ment plans and projects in that regard? All conditions were established for the development of flour export in Russia. Businesses have the necessary pro- duction reserve capacities. Since the flour export market is not as big as the grain market and no special terminals are required for loading and unloading operations, port capacities are quite sufficient. The product quality pro- duced in Russia is high. Since the flour quality criteria in Russia are higher than those of foreign countries, inclu- ding the EU countries, the relevant regulations do not have to be harmonized. First of all, the basic issues are 1- Logistic (Important flour exports like Turkey and Kazakhstan are closer to customers; 2- The importing countries developed the- ir own milling sector; 3- A strong relationship between flour exporters and importers. Also, unlike Turkey, Russia’s government does not back the flour export. The government usually backs the wheat producers that go against the flour business’s in- terest. (For example, Russian grain is exported to Mon- golia, one of Russia’s largest flour importers.) Therefore, the important thing is not to invest but to provide the state’s backing for Russia flour export so that we can compete against exporter of other countries that enjoyed Moscow’s backing for a long time. Could you please give us some information about flour consumption habits and culture in Russia? How is flour consumed in your country? Is there any change in flour consumption habit in recent years? What de- velopments have been observed in Russian flour market recently? In Russia, bakery products are the main food item of the people and have a rich culture, historical tra- ditions, and economic foundations. In Russia, bread is the most impor- tant food. Traditionally, especially in villages, people bake home-ma- de bread. First of all, they do not meet their nutritional needs, but to show hospitality, the housewife’s ability and the abundance in the house. Of course, such traditions are losing their importance today. The production of flour products in the country is mostly made by in- dustrial ovens. However, traditions are still able to keep the consumpti- on rate, which has been decreasing for years, at a high level. While the consumption percent of sweet products inc- reases, the consumption of bakery products decreases. For this reason, there has been little decrease in the flour production. We do not expect big changes in the coming years and even in the coming decades. Flour is a value-added product compared to gra- in. Russia has the raw material for the flour. Do you think Russia has become also a major flour exporter? We believe that Russia may increase its flour exports several times and become one of the biggest exporters of this product. Russia is the main wheat source for Turkey. In 2017, Russia got a 59 percent share from Turkish wheat im- ports. Russia has a substantial production of wheat and Turkey has substantial flour milling investments with excess capacity. Do you think Russia and Turkey can develop a partnership in grain and flour industry? Just like Russia, Turkey is an important exporter of agricultural products. At the same time, Turkey is the bi- ggest importers of Russian grain. The proximity of the interests of our country in the agriculture and food market hints that cooperation should be established, and we need to strengthen relati- ons based on mutual benefit. There are some claims that Russia would limit the grain exports to ensure domestic food prices. What do you think about that subject? Since there is a free market, grain prices will be associ- ated with world prices while considering any administra- tive action in the export area. It is preferable to have the domestic price stability by the market regulations of the food market like making grain interventions.