Putin’s “Potemkin Village” Bluff Fails Big Time At Valdai Club As He Promises To Sell China Unlimited Quantities Of Stuff She Doesn’t Have

The Valdai Club is one of Russia’s major annual events where “thinkers” gather and basically plan out the future of what Russia should look like. Think of it as a Russian version of the American Aspen Institute.

Putin recently declared at the Valdai Club’s annual meeting that as part of the trade war between China and the USA, Russia is prepared to sell to a willing China all of the soy and wheat crop that she needs.

Putin also made reference to deepening economic cooperation with Beijing, going so far as to claim China stands ready to buy as much soybeans and wheat as Russia can produce.

Of course, there’s no way Russia could even come close to filling the gap left by China’s latest tariffs imposed on soybeans coming from the United States, which Putin acknowledged.

“They are ready to buy from us as much as we can produce but the issue is we are not ready for this now… not yet ready for such volumes,” Putin said. (source)

This report should be taken very seriously by the US- if Russia could actually fulfill her promises.

Soybeans and wheat are two major commodities that deserve incredible attention because they are major food staples for nations. A simple interruption in production could cause havoc in whole nations because if one does not eat, the people get angry and start to revolt. No nation can have a war with a starving army, which is the main joke of any threats from North Korea, as they may have the world’s largest army, but it is only so because the army is the only way to guaranteed one full meal a day. Given the choice, the North Korean army would forsake a raid on any nation over attacking the “all you can eat” buffet at the Golden Corral.

Russia can promise to sell all of the soy and wheat that she wants to China. The problem is that she cannot sell something that she does not have.

Soybean production is largely controlled by two nations- Brazil and the US in that order, which at 45% and 38% respectively make up 83% of the global production, with Argentina and Uruguay next at 4.9% and 3.8% respectively, or 91.7% of all soy. The remained is almost entirely made up of minor exports from other South American nations.

Russia does not have a soy crop of any measurable size to export. How can she sell something she does not have? It is sort of like the “free medical care” in the USSR, which was offered to all citizens, but when they went there was no medicine to give, so care could not be offered.

China can bluff all she wants, but she cannot survive without the US soy imports as she consumes 63% of all soy in the world.

Wheat is a larger issue but easy to understand. The US is the fourth largest wheat producer at 47.3 million tons. Russia the third at 85 million tons. However, China is the largest wheat producer in the world at 134 million tons.

Russia theoretically “could” be an exporter of wheat. The next question to ask is, who are the current importers?

The largest wheat importer in the world is Indonesia, at 6.1%, followed by Egypt, Algeria, Italy, and the Philippines at 5.3, 4.4, 4.3 and 4% for each. Even tiny Japan, which imports over 75% of her food currently and is known to have many issues with food shortages due to her size and land structure, only imports 3.9% of all her wheat.

China barely makes the top 20 at the 20th place, importing 1.9% of her wheat and is nearly tied with the US, which imports the same percentage. Russia by comparison is in the 84th place, at .1 percent.

The US clearly does not have food shortage issues. However, even she imports nineteen times more wheat than what Russia imports. Certainly the US is not starving at all, but is drowning in food of all types.

The highest “import” for all wheat is only at 6%, and with the exception of the top five importers, no nation exceeds 4% of all imports for wheat in any one nation.

Why does China need Russia’s wheat? One can say her people are at risk of starving, but clearly China appears to be producing enough wheat to feed her people.

This suggests either the circumstances have changed, and they do not appear to have changed, or that China does not need Russian wheat, which suggests that Putin is bluffing.

What China needs is pork, and between the US at 16% and the rest of western Europe in the top ten nations make up 80% of all pork exports. Russia is the 22nd larges exporter of pork at .2%.

Putin can say all he wants, and he is likely doing so to attempt to scare people.

During the Soviet Union era, the USSR would build “Potemkin Villages,” which were fake cities and buildings constructed in order to give the appearance of prosperity when the case was not so. It is similar to how China has been building whole vacant cities and apartments buildings to show off her “strength” to the world, or how the Russian government has been renovating and building massive orthodox churches all throughout Russia yet they are largely vacant just in the same way that Saudi Arabia was building mega mosques around the world that were also vacant.

His comments are a bluffing point meant to attempt to show power. However, a look at the raw data does not indicate strength or even the capacity of Russia to handle her supposed requests from China, if she made them at all.

There has been a major turn in Russian media favoring China, and the reason for this is not friendship, but fear. Russia has one-tenth of the population of China. If China wanted, she could theoretically walk into eastern Siberia right now and seize it from the Russians, and there is little the Russians could do to stop her because while possessing a firepower advantage, they are physically outnumbered.

While Russia does not like Japan, she would rather see a Japanese invasion of China just to keep them suppressed and away from Siberia. She would have to deal with the Japanese, but that would be easier in terms of numbers than fighting the physically massive Chinese army. She will pay lip service to China and may provide minor help, but she will not give them serious aid because she knows that eventually China would come against her.

Russia is playing a political game here.

If there is one thing to see, it is to consider watching the soybean futures, because after oil, it is a highly valuable commodity whose importance will continue to grow.

Source