Russia and China Partner on 30 Grain Hubs

Last weekend, a Russian-Chinese intergovernmental commission agreed upon a memorandum for $1.1 billion investment into 30 grain facilities. One grain terminal and 29 elevators are expected to be built in various parts of Russia to support exports of grain to China. As China purchases more Russian grain, more terminals may need to be constructed; so overall investment will depend on scale of purchases, according to Sergei Levin, Russian Deputy Agriculture Minister.

Construction on the project is expected to start this fall on the Zabaikalsk-Manchuria line and should be completed by 2025. The facilities are intended to hold up to 8 million tons of grain, although initial capacity is expected to be much lower. In addition to the first memorandum on construction, a second agreement is being worked out with Chinese food corporation COFCO for purchases of Russian grain through these terminals. After discussions at a meeting of the Russian-Chinese intergovernmental commission, negotiations with COFCO intensified and they have progressed significantly in the signing of the second memorandum, Levin said. Future plans may include expanding shipments to other regions depending on market situation and transportation conditions.

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