Russia, China to build grain corridor with $160m border logistics hub

Russia China grain corridor
Wheat being harvested in the Rostov oblast (Vadim Anokhin/CC BY-SA 3.0)

China and Russia have agreed to invest in a “land grain corridor” to improve trade between the two countries, the South China Morning Post reports.

A group of Russian companies will work with China’s state-owned Chengtong Investments to create a $160m logistics hub on their border. 

The hub, to be known as the Nizhneleninskoye-Tongjiang Grain Terminal, will be located between Vladivostok and China’s northeastern province of Heilongjiang.

It will help move food grown in the Ural Mountains, Siberia, and Russia’s Far East.

The deal was signed at the four-day Eastern Economic Forum held in Vladivostok this week to improve trade and investment links between Russia and China.

Russia’s wheat production rose by more than 60% over the past decade, making it the world’s largest exporter. 

It is expected to account for more than 20% of the global wheat trade in the 2022/23 season, thanks in part to its ongoing disruption of Ukrainian grain exports.

Sanctions imposed

No direct sanctions have been imposed on Russian grain by Western countries. Sanctions were imposed on some Russian banks, companies and individuals, however, and these have made it more difficult for Russian exporters to ship grains and arrange payments.

The value of China-Russian trade jumped 32% from a year earlier to $155bn in the first eight months of this year. 

While most of that was from traditional oil and natural gas sectors, imports of Russian agricultural products, such as soybeans and rapeseed oil, have rapidly increased as well.

President Xi Jinping last week reiterated how important grain security is, during his visit to Heilongjiang, where the grain hub will connect with Russia. He said the region must become an important gateway in China’s “northward opening-up”.

“Basic agricultural infrastructure between the two countries should be enhanced,” he added.

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