Miller Magazine Issue: 115 July 2019

18 NEWS MILLER / JULY 2019 COFCO in talks to buy stake in Russia’s third largest grain terminal The Chinese state food trading corporation COFCO is eyeing a 25 percent stake in Russia’s third-largest grain terminal, KSK in Novorossiysk, the Vedomosti daily and Reuters reported, citing sources close to the deal. DeloPorts, the holding company that owns the terminal, confirmed nego- tiations have begun without disclosing the details. The possible deal with COFCO comes on top of sev- eral others pointing to possible expansion of Chi- nese investment in the Russian agricultural sector. Agriculture is a key strategic sector for the Krem- lin, which has poured money into development and seen grain production and exports soar as a result. Grain is the new oil, with Russia earning over $20 billion a year from grain exports in recent years. That makes it the second biggest export product af- ter raw materials, earning the country more than it makes from the export of arms. Russia has been the world’s largest grain exporter for the last few years and is on course to retain the title, although this year it is running neck and neck with Ukraine. KSK, which is a deep water terminal, handled 4.8 million tonnes of grain exports last year. A 25 per- cent plus one share stake is controlled by commodi- ties trader Cargill, which is reportedly not participat- ing in the COFCO deal. China has kept its agricultural market largely closed to imports as it tries to cover its own domes- tic needs, but as the middle class emerges demand is rising and Beijing is slowly opening up to more The Chinese state-owned food company COFCO is in talks about buying a shareholding in a grain export terminal in the Russian port of Novor- ossiysk as part of its expansion in Europe. Such a deal could give COFCO greater capability to export Russian grain in large volumes to the big Mid- dle Eastern markets.