The US Agriculture Department's attache in Moscow released the following report, dated February 14, on Russian food imports Attache reports are not official USDA data. Report Highlights: Exports of US agricultural products to Russia are growing due to the revolutionary changes in Russia's retail and food processing sectors. Russia imports over $12 billion in food and agricultural products each year, and imports are growing by roughly 12 percent annually.

In 2004, US agricultural exports to Russia grew to over $850 million, up 40 percent year-to- year, reversing a downward trend; from 2001 to 2003 US exports dropped due to a series of market access barriers.

Executive Summary: Economic improvement over the last five years has increased consumer purchasing power and demand for quality products - pushing the retail food market to $68.1 billion in 2003, 25 percent more than in 2002.

Final 2004 figures are not available, but food retail sales were probably above $83 billion, up 22 percent. Russia is the fastest growing retail food sales market in the world, with the potential to again double in size by 2008, just as it did since 2001.

With this growth and the participation of multinational retailers, the retail market has become more competitive, and quality in now counts even more in purchasing decisions.

In fact, suppliers now face penalties for failing to provide either the agreed quantity or quality to retailers. This creates a natural advantage for US high quality consumer ready products, especially poultry, meat, snacks, nuts, fresh and frozen fruits and vegetables, wine, beer, seafood, among many others.

Copyright Reuters, 2005