Mongolian Hot Pot
I have a friend in Mongolia who occasionally blogs about trade issues. Jargal Dambadarjaa and I met years ago at a Rotary Club in Denver, where he was studying and doing business. (Did you know that Colorado has the largest Mongolian population in America!)
Tuvan Customers
Jargal’s latest post is about trade between Mongolia and Russia and transhipments from China to Russia across Mongolia. He tells about a border crossing between northwestern Mongolia and the Tuva Republic that is part of Russia. Apparently, Tuva has no access to the rest of Russia by train, so most of what they purchase comes from China, passing through Mongolia. Despite the lack of a rail connection, the Tuvans are merrily selling Chinese goods to the rest of Russia, transporting them by truck. Jargal says the Tuvan side of the border crossing features a couple of food markets and 3-4 cafes that seem to get much of their business from the Russian customs officers.
It’s the Chinese goods that sustain business. While Mongolia imports wheat, flour, gasoline and energy from Russia, there is relatively little that is not Chinese moving in the opposite direction. Mongolia would like to sell more meat and live animals to the Tuvans, but the Russians are limiting imports for health reasons. Recently, shipments of 2,000 breeding animals from Mongolia were stopped at the border, while – at virtually the same time – Tuvan authorities said they wanted to buy up to 65,000 animals from Mongolia.
Jargal points to price differences on meat between Mongolia and Russia as something that should drive the trade and give Mongolia an export industry. He says that boneless beef that costs US$8 in Kyzyl, Tuva’s capitol, costs only $3 in Mongolia’s capitol, Ulaanbaatar. The same beef purchased in Ulaangom, where it comes from, runs only $.80. The key will be working with the Russians to make sure that Mongolian animals and their products meet the European health standards that Russia is increasingly adopting. Jargal says there is scope for investment in a new meat processing plant in Mongolia to supply this trade.
Another sign of potential for business, says Jargal, is the popularity among the Tuvans of trade fairs that have been run on the Mongolian side of the border, featuring both Mongolian and Chinese goods. He says that one recent fair resulted in a traffic jam at the border when more than 4,000 Tuvan vehicles tried to cross the border to get to it.
