Russian confectionery market prepares to increase export volumes

Russian confectionery market prepares to increase export volumes

Despite political turbulence experienced surrounding Russia’s global trading arrangements, its confectionery market is continuing to prove resilient, reports Eugene Gerden

 

Amid the ongoing recovery of Russia from the financial crisis and its consequences, leading domestic confectionery producers plan to significantly increase their volume of production and exports this year, according to recent statements of manufacturers.

Elizaveta Nikitina, executive director of the Russian Center for the confectionery market (TSIKR), a Russian analyst agency in the confectionery business, said that after the recession in 2015, the country’s confectionery market is actively growing. Nikitina said: “In 2017, the level of consumption in the Russian confectionery market began to increase in all categories, especially in the segment of chocolate and sweets.

“During the crisis, consumption shifted to more affordable sweets. However, in recent years, the demand has started to recover. Now the growth of the market continues, while consumers are interested in more expensive products. We predict further growth of the market in the mid-term, especially taking into account the fact that consumption of sweets in Russia is still significantly lower than in western countries. In addition, exports of Russian confectionery products will also grow this year.”

According to data of the Russian Ministry of Agriculture, thanks to a weak ruble, exports of Russian confectionery products are steadily growing, with the biggest being observed in the case of China and other countries in Asia Pacific. In addition, data from TSIKR claims the production of all kinds of confectionery products in Russia in 2017 amounted to 3.63 million tonnes, which is 2.5% more than in 2016.

Of these, the production of bakery confectionery reached 1.85 million tonnes, while chocolate stood at 710,000 tonnes. The production of sugar confectionery products last year increased by 3% on a year-on-year basis, to 1.07 million tonnes. The majority of facilities for the production of confectionery products in Russia are located within the central part of the country. In regard to exports, the volume of foreign supplies of Russian confectionery products in Q1 of the current year grew by 23%, compared to the same period of last year, and amounted to about 100,000 tonnes.

In value terms, these figures amounted to $230 million. The majority of exports of Russian confectionery are intended for the Far East states, according to producers and exporters. This includes the Novosibirsk chocolate country, one of Russia’s leading chocolate businesses which has confirmed plans to increase shipments to China.

Other companies in the sector, mainly in Eastern Russia and Siberia, have shown a trend towards Asian export. According to their representatives, Chinese retail chains are interested in the supply of Russian confectionery products.

As of September 2017, China accounted for more than 15% of Russian exports of chocolate confectionery products, and 25.5% of pastries. Denis Manturov, Russia’s minister of industry and trade, said: “The enormous growth of Russian confectionery exports to Asia-Pacific in 2017 was mainly due to the low base effect, as well as the ever-growing demand for Russian confectionery products among Asian consumers. “This year, the growth continues. In light of western sanctions, Russia and China are strengthening co- operation in the field of food business, including the confectionery segment.”

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