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“There is no Russia without buckwheat”

“Legend has it that, 1,000 years ago, when Greek monks spread Christianity to Russia, they brought with them more than just the Bible. They brought a grain, a seed, so magical, nutritious and delicious that it struck an instant chord with the Slavic soul – and the Russian stomach. That grain was buckwheat. And because the first people to cultivate it here were Greeks, the Russians called it grechka”


Buckwheat is currently enjoying a revival in Western Europe due to its status as a trendy health food, although it has been a feature of Russian cuisine for centuries. It is such a ubiquitous feature of Russian meals, that when reports began to circulate last December of a low buckwheat crop yield, many Russians began ‘panic buying’ stores of buckwheat. In reality, the shortfall was minor. But the mere suggestion that supplies would be low prompted millions of Russians to rush out and stock up on the staple.

Unlike price fluctuations of some other foodstuffs, which have so far just served to inconvenience consumers, the threat of dwindling buckwheat supplies struck a chord with many Russians. Buckwheat is not a luxury item in Russia, nor is it possible to go without it, seeing as it is present at most mealtimes across Russia. On a personal note, grechka is a food that I grew up with, and it is something that I have even been involved with in business. VIYM has invested in the company Agro Alliance, and last year it had announced the launch of a new buckwheat processing plant in the Orlov Region, with future plans to expand its operations and capacity.

Some commentators have said that buckwheat is ‘a barometer of the social-economic state of Russia’, or a metric by which to gauge public sentiment on a range of wider issues – from trends within culture and food, to future economic prospects and retail prices. As a result, a comparison can be drawn between this apparent ‘buckwheat barometer’ and the Big Mac Index. While the Big Mac Index has been suggested as an informal way of assessing the purchasing power parity between different currencies, the ‘buckwheat index’ appears to reflect Russians’ attitudes to their economy.

Official economic data and performance indicators are a key part of an investor’s toolbox. However, perhaps on some occasions, it may be worth exploring and considering other ‘outside the box’ indicators which can provide additional insight into local market conditions and inform investment decisions :)

2 Comments Post a comment
  1. Dear Andrey!

    Buckwheat as a good example of alternative investment.

    Do you use some SPV (trusts or mutual funds) in Russian jurisdiction?


    March 17, 2015
  2. Buckwheat is neither a good nor bad example. Agri has been a lucrative industry for attracting PE investment in a number of markets but, in my honest opinion, is unreasonably neglected in Russia (and most of the FSU for that matter).

    As for structures, I am and always have been a great believer in the simple wisdom of ‘when in Rome, do as the Romans do’ – we use the same structures as most peers in the industry.

    A bit dated, but still a pretty comprehensive presentation of the structures generally employed by the industry ( ; slide 53-77) was published by UFG back in 2013. It naturally doesn’t provide for the latest nuances arising from the FCCs (КИКи) initiative but we don’t foresee any severe game changers in the industry as a result of this legislation.

    There are a few very competent practices both in Moscow and St. Petersburg ( that could provide you with a more specific overview and tailor advice to your particular needs.


    March 18, 2015


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