Baltic Sea grain production and export growth creates supply chain opportunities

The Baltic Sea region has emerged as an important European hub for grain production and exports, and its strategic importance is set to increase.

Over the past 20 years, grain production has expanded, particularly in Poland, Lithuania, Latvia, and Estonia. The escalation of the war between Russia and Ukraine has further increased the region’s relevance as an alternative trade corridor. More fundamentally, its strategic importance is likely to grow because of rising regional grain production and exports, its net export position, and market opportunities in Africa.

We expect the region’s growing importance to drive further investment in inland storage, origination networks, ports, and logistics infrastructure. The opportunities and companies’ ability to capture them will vary across markets and by company type, including global grain and oilseed players, Nordic cooperatives, fully integrated traders, semi-integrated traders, and crushers active in trading.

RaboResearch identifies five key business opportunities and strategic directions:
•    Capture growing export flows, particularly to sub-Saharan Africa.
•    Invest in inland storage and logistics infrastructure.
•    Invest in port terminals and logistics infrastructure.
•    Participate in market consolidation.
•    Support the expansion of regional agribusiness champions.

The region offers an attractive investment proposition, but market entry and expansion strategies should remain selective. Investment decisions must account for differences in institutional and political stability, geopolitical developments, climate-related production volatility, and potential shifts in land use and animal protein production. Success will depend on selecting the right country, asset, and local partner, supported by access to grain origination with efficient logistics and diversified domestic and export outlets.