Macedonia and Bosnia-Herzegovina also suspected of illegal exportHefty decrease Russian import
Several European countries that fall outside the boycott, are facing possible sanctions. Russia suspects these countries of illegal export of European produce, and has requested clarification regarding increased export volumes. On the other hand, Russia is willing to negotiate with Moldova on lifting the sanctions. In that case, the country does have to guarantee that no illegal export will occur. South American countries still see potential in trade with Russia, and Lebanon also looked into the export requirements.
In Russian media, prime minister Medvedev said that it’s possible for the sanctions to be extended. The sanctions were announced for a year, but the prime minister pointed out this doesn’t mean that trade can get started again in August 2015. The prime minister also admitted that not all products could be replaced.
At the European side, the consequences are also felt in sectors that don’t come directly under the boycott. Because of price decreases in agricultural products, growers are postponing investments, which is felt by the machine builders. When it comes to logistics, the consequences are also noticeable. Cooling trucks that used to go to Russia with fresh produce, are now used with other products. Consequence: lower prices for transports to Russia.
Russian import halved
Statistics for October show that the vegetable import amounted to 62.7 million dollars. In September, 33.8 million dollars’ worth was imported. In October 2013, the import value amounted to 126.9 million dollars. That was 64.2 million more than this year. Nut and fruit import also went down from 437 million dollars in 2013 to 345 million dollars in October this year. Figures show how hard it is to replace the import. According to several specialists, other countries with large volumes, like China and Turkey, are not able to replace the lost import. That’s also reflected in prices. Studies show that prices went up by 30-40%, and 75% of Russians say they have seen prices go up.
Incidentally, supermarkets indicate that they succeed in replacing the import. Domestic cultivation, Turkey and Azerbaijan are named as new suppliers. For a supermarket chain such as X5, the boycott meant that 25% of horticultural products had to be replaced. For certain products, like iceberg lettuce and leek, it’s more difficult to find new suppliers.
Boycott opportunity for Poland
Prices for the Polish Idared have reached a low point. The apples yield between 7-11 cents per kilo, the past five years the price hasn’t been so low. The variety was particularly popular in Russia. According to WAPA estimates, the Idared volume in Poland will amount to 750,000 tonnes, 7% more than a year before. According to experts, however, the boycott also offers opportunities for the sector. They point out that with earlier sanctions, the sector was also able to switch fast, and that the boycott gives the opportunity of entering new markets and investing more in existing relations.
Macedonia and Bosnia-Herzegovina called to task
The Russian phytosanitary service suspects Macedonia and Bosnia-Herzegovina of illegal export of European produce. Macedonia was asked for clarification regarding the export. The country has to prove that no European products were exported illegally. Bosnia-Herzegovina had already been asked for clarification regarding the significantly increased export. Montenegro and Albania were also asked for clarification. These countries are facing possible sanctions if the Russians cannot be convinced that the export is legal.
Sanctions Moldova possibly lifted
While a number of countries are facing possible sanctions, the Russian inspection announced its willingness to negotiate with Moldova on lifting the sanctions. The sanctions were imposed after Moldova signed a free trade agreement with the EU. A condition for lifting the sanctions is that the country needs to take measures to prevent illegal export.
Peru biggest exporter South America
The Peruvian Association of Agricultural Producers said that the South American country leads the continent in terms of fruit and vegetable export to Russia. The boycott helps Peru increase its export by 10 million dollars a year. Between January and June of this year, export already went up by 16%. Reports say the total export value this year will amount to 80 million dollars. The products mainly go to the cities of Moscow and St Petersburg.
Ecuador still sees a lot of growth opportunities
The Ecuadorian ambassador in Russia says that the country utilizes 20% of the trade potential between the countries. The country has a direct sea route across the Atlantic Ocean to Russia, a journey of 21 days. According to the ambassador, trade amounts to 1.5 million dollars this year, 15% more than in 2013.
Kyrgyzstan exports more apples
According to the latest statistics, export from Kyrgyzstan to Russia increased over the past eight months. For apples, the export increased to a value of 85 million dollars. The volume amounted to 15,000 tonnes. 63 tonnes of potatoes and onions were also reported to be exported, that is 13% more than a year before.
Kaliningrad going to grow blueberries
The Kaliningrad region is investing in blueberry cultivation. The first harvest will have to go to market early next year. The newly established company cultivates the berries on an acreage of 3.3 hectares. According to the initiator of the project, only Argentinian and Chilean blueberries are available. How much the blueberries would cost wasn’t announced, but in neighbouring Belarus, a kilo of blueberries yields between 11 and 12 dollars per kilo. Birds do pose a threat for the cultivation, and a solution is being looked for.
Lebanon invests in export
The Investment Development Authority of Lebanon published a report with the standards to which products have to comply to be eligible for export to Russia. In the report, subjects like hygiene requirements, inspection of products, packaging and the status of importers can be found. According to the organization, Russia is an attractive market for Lebanese exporters. Lebanon hopes to profit from the import stop from Western countries.
Ukrainian cucumbers very expensive
The cucumber price keeps going up. Within a week, cucumbers yield 70-80% more, and the price is 1.68-1.86 dollars per kilo. That’s 50% more than in the same period a year before. Prices and fluctuations vary a bit from one wholesale market to another, but in general cucumbers got a lot more expensive. Prices are at the highest level in the past ten years. Because the Ukrainian season is drawing to a close and import is lagging behind due to the unstable foreign exchange market, prices went up.
Publication date: 11/20/2014
Author: Rudolf Mulderij