The EDB starts to develop a concept of the Eurasian commodity distribution system

11 June 2021

Moscow, 11 June 2021. The EDB has launched an applied study to inform a draft concept of the Eurasian commodity distribution system, said Nikolai Podguzov, Chairman of the Eurasian Development Bank’s (EDB) Management Board, at a plenary session of the 33rd Foreign Investors’ Council (FIC) chaired by the President of Kazakhstan. The head of the EDB also spoke about the impact of the coronavirus pandemic on key sectors of the economy. He noted the resilience of the agricultural sector and good prospects for the global food trade.

Building effective food trade without barriers and restrictions is among the most important integration priorities of the EAEU member states. The President of Kazakhstan had earlier proposed at a meeting of the Supreme Eurasian Economic Council to explore the possibility of setting up a common commodity distribution network with the interested EAEU countries. In this context, the Bank launched an applied study this April to develop a concept of the Eurasian commodity distribution system. The study is being carried out in the EAEU countries, Tajikistan (an EDB member country), and Uzbekistan (a potential EDB member country).

The study by the EDB includes a comprehensive cross-country review of the following components: analysis of trade turnover, trade balances for food products, and the existing infrastructure; identification of transport and logistics corridors and requirements for the operation of wholesale distribution centres; and preparation of proposals on how to set up a single digital platform and harmonise legislation in the EAEU countries in order to create a common commodity distribution system. Bank experts will also assess the project’s economic integration effect.

“The Eurasian commodity distribution system should help Kazakhstan to comprehensively address certain strategic tasks that will contribute to its sustainable development. Among the key ones is to improve the competitiveness of the country’s agricultural and food producers. Costs and losses in the production, handling, storage, and transport of goods could be reduced by optimising the supply chain and upgrading infrastructure. An important development driver would be the creation of new export channels and the optimisation of existing ones, including those between the EAEU countries. Greater productivity and access to new markets should help to stabilise food prices and improve producers’ incomes. We plan to finalise the study by the end of this year,” said Nikolai Podguzov.

Nikolai Podguzov also shared data on the pandemic’s negative impact on global industries. He noted, in particular, that manufacturing output declined by 4.1% year-on-year. The hardest-hit industries were automotive and equipment manufacturing, metallurgy, and clothing. Many service sectors also saw a downturn. Agriculture was the only sector to show positive growth, with agricultural production in the EAEU rising by 2.3% year-on-year in 2020.

“Global trade in agri-food products remained broadly stable. It can be said that this sector has proved largely immune to the effects of the pandemic and developing countries have even managed to boost their export revenues. Exports in the first six months of 2020 grew by 4.6% year-on-year. The global food trade has a great future,” he emphasised.

“Food products were also the Eurasian Economic Union’s leader in mutual trade in 2020. Trade in these commodities reached US $7.5 billion in the Union, and their share in the structure of mutual trade rose from 11.8% to 13.7% over the year. These developments in mutual trade in food products were due to, among other things, the need to ensure food security in the EAEU during the crisis period. The growing share of food and agriculture can become a new trend in intra-union trade. This would help to reduce imports from countries beyond the EAEU,” added Nikolai Podguzov. 

Additional Information:

The Eurasian Development Bank (EDB) is an international financial institution promoting integration and development in its member countries – Armenia, Belarus, Kazakhstan, the Kyrgyz Republic, Russia, and Tajikistan. The EDB's charter capital totals US $7 billion. The Bank was established in January 2006 and is headquartered in Almaty. The EDB’s portfolio mainly consists of projects with an integration effect in the areas of transport infrastructure, digitalisation, green energy, agriculture, industry, and machinery.

The EDB Media Centre:

Azima Sapargaliyeva +7 (777) 750 00 08 (Almaty)

Sergey Gorbachev +7 (916) 727 22 00 (Moscow)

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