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Georgia increases its fruit and vegetable export potential

From 2009-2013, exports of fresh vegetables and fruit from Georgia grew by 17% in volume to reach 101,000 tons. Over the same period, they also doubled in value to exceed US$ 200 million.

Georgia has started actively increasing the export potential of its fruit and vegetable industry, according to APK-Inform Agency and based on official statistics for the country.

From 2009-2013, exports of fresh vegetables and fruit from Georgia grew by 17% in volume to reach 101,000 tons. Over the same period, they also doubled in value to exceed US$ 200 million.

In many ways, this trend reflects a reorientation of Georgia’s fruit and vegetable sector towards exports to the EU due to strained relations with Russia. This reorientation has seen the EU share of general exports from Georgia grow from 12-20% in volume and 50-57% in monetary terms.

While showing a fairly modest share in the volume of export supplies, European importers provide more than half of all foreign currency revenues to the Georgian fruit and vegetable industry.

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Image: “Georgia proper shown in dark green; areas outside of Georgian control but claimed as part of its sovereign territory shown in light green” by Chipmunkdavis [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

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Exporters of fruit to Russia urged to demand full payment on loading

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South Africa’s Citrus Growers’ Association (CGA) has warned fruit growers of risks of defaults by Russian importers.

Describing the current economic situation in Russia as ‘extraordinary’, the CGA said it is one that demands “extraordinary measures to be taken to prevent losses to SA fruit industry.”

In a message from the CGA representative in Moscow, it advised SA exporters not to ship fruits without 100% payment on the date of loading. “In our view as experts on the spot such condition will be understood and positively accepted by prudent Russian importers. For importers commodities now present better guarantee against losses, than cash in Rubles.”

Forecasts of further decline of oil prices, the present devaluation of Chinese currency, economic problems in Far Eastern countries, and unfavorable news from the New York Stock Exchange are factors expected to see the strengthening of the USD and further weakening of the Ruble, it said.

“So far retail has been loyal to their word given to government to keep prices stable. But with weakening of the Ruble purchasing power in the international markets they will not be able to subsidise the prices, and first of all of imported commodities,” it cautioned.

source: CGA FROM THE DESK OF THE CEO (33/15) 28 August 2015

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Healthy lifestyles and exoticism at the Russian retailer 7th Continent

7th Continent, one of the largest Russian retailers, promotes healthy lifestyles and a large variety of exotic and flavorsome fruit and vegetables.

7th Continent, one of the largest Russian retailers, promotes healthy lifestyles and a large variety of exotic and flavorsome fruit and vegetables.

7th Continent was one of the leading food retailers that detected the all-year round demand of Russian consumers for fresh fruit and vegetables, and not only during the season period. “According to our researches, buyers have become more discriminating,” said marketing director Alexey Zakharkin. “Some economise by choosing the cheapest goods, others keep looking for novelties and exotics, but both categories of consumers pay attention to nutritional benefits. That is why we keep diversifying the assortment of our fresh category, we increase the quantity of our suppliers in order to offer our customers a large choice and good quality of products at reasonable prices.”

Supporting this strategy, a model of a fresh market (Vegetable bazaar) was created in 7th Continent supermarkets and Nash hypermarkets. From the very entrance, a customer is directed to the fresh department with counters of fruit and vegetables. Buyers thus not only easily find what they need, they are also stimulated to purchase healthy food.

Sweet potatoes, durian and spicy herbs

Indeed, one can find anything at the Vegetable Market, from potato to wheat sprouts; from 10 varieties of apples to flavoured durian. There are fruits and vegetables from every part of the world; at any season, one can treat oneself with raspberry and bramble, melon and watermelon, and any other fruit loved by Russians but only available in season. There is a special gourmet zone with fresh spicy herbs, greenery and lettuce.

Due to the short shelf life of fresh produce, the managers of 7th Continent pay close attention to their quality, checking it at every stage of sale. In each store there is a quality control service and every two hours the assortment is inspected to ensure a “fresh abundance” display.

On the wider horizon, the retailer establishes partner relations with Russian and foreign farmers and producers. To ensure the quality of goods offered, the relevant manager visits the plantations and the production of potential suppliers, examining the safety, wholesomeness and taste of the products before concluding the contract.

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Hyper, Super and Gourmet stores in 14 cities

7th Continent, founded in 1994, is a federal Russian retailer operating in two formats: supermarkets and hypermarkets. It has 136 supermarkets (brand name 7th Continent) in Moscow, Moscow region and Kaliningrad, and 20 hypermarkets under the brand name Nash Market are located in 14 Russian cities and towns.

The average daily traffic is 1,000-1,500 customers in the supermarkets and 2,500-4,000 in the hypermarkets. Of the supermarkets located in the center of Moscow, 26 are “gourmet” stores; their customers are residents with high income and tourists. Other stores are focused on customers with medium incomes.

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7th Continent corporate site

 

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Putin prolongs Western food ban

Spanish fruit and vegetable growers are among those asking the European Commission to urgently adopt new aid measures for them amid Russia’s extension of its veto on certain Western food imports.

Spanish fruit and vegetable growers are among those asking the European Commission to urgently adopt new aid measures for farmers amid Russia’s extension of its veto on certain Western food imports.

The Russian move came in retaliation to the EU decision to prolong until January sanctions against Russia over the Ukraine conflict.

Russia’s original ban – which applied to food products including vegetables, fruit, beef, pork, fish and dairy products from the EU, the US, Canada, Norway and Australia – was introduced last August. Yesterday, Russian President Vladimir Putin announced he was extending it, “by one year beginning from today.”

Fepex, the Spanish federation of associations of producers and exporters of fruit, vegetables, flowers and live plants, immediately called on the European Commissioner for Agriculture Phil Hogan to extend the exceptional measures used by the Commission to help EU fruit and vegetable growers affected by the existing ban.

In a letter to Hogan, Fepex said the Russian ban on the import of EU fruit and vegetables in force since last August had deprived the Spanish fruit and vegetable sector of the top non-EU export market. “There are no alternative markets that can compensate for this loss,” it said.

Fepex calculates Spanish fruit and vegetable exports to non-EU countries in the first quarter of this year were down 17% – a total of 218 million tons – on the same period in 2014. It said the extension of the veto “will worsen a major crisis in the EU summer fruit market” and called for the Commission to urgently adopt market crisis management measures.

Meanwhile, Murcia’s Ramón Luis Valcárcel Siso, a member of the European Parliament from Spain’s ruling Partido Popular party, in a written question in the Parliament has called for stone fruit to be covered under the earlier exceptional support measures.

He said these existing measures did not contain any exceptional support for Spanish plums, table grapes, kiwifruit, peaches, apricots or nectarines.

“Exports to alternative markets have not absorbed the 60,698 tons which were previously exported to Russia. Measures need to be taken therefore to prevent prices falling as they did between 2013 and 2014 (by 32.3% for plums, 36.7% for yellow flesh peaches and 44.9% for yellow flesh nectarines). The marketing season started in April and farmers are now extremely concerned,” he said.

Photo of Russian President Vladimir Putin: Kremlin.ru [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons

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Vegetable prices keep climbing in Russia

Russia’s retail sector is highly dependent on imported vegetables – particularly during the off-season. In 2014, Russia imported 2.4 million tons of fruits and vegetables making it the third largest importer globally.

Fruit and vegetables prices in Russia were up 43% in February 2015 compared to the same month last year, a new report by the US Department of Agriculture says.

Titled ‘Vegetable Prices Keep Rising’, the report on the Russian Federation blames the import restriction, in combination with a depreciating ruble, for the soaring prices.

It also says many Russian consumers are buying less vegetables or switching to cheaper ones as their purchase power drops along with Russia’s weakening economy.

Russia’s retail sector is highly dependent on imported vegetables – particularly during the off-season. In 2014, Russia imported 2.4 million tons of fruits and vegetables making it the third largest importer globally.

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The report also says that the most popular vegetables for Russian consumers are cabbage (21% of total vegetables volume), tomatoes (20%), onion (13%), carrot (11%), cucumbers (10%), beets (6%), pumpkin (4%), and squash (3%).

In 2014, Russia produced 15 million metric tons (MMT) of fresh vegetables which covered around 86% of total domestic consumption needs. The vast majority of all vegetables in Russia (70%) are grown by households and do not enter modern retail channels.

The main vegetables produced in Russia, besides potatoes, are cabbage (3.4 MMT), tomatoes (2.2 MMT), onions (1.9 MMT), carrots (1.6 MMT), cucumbers (1.1 MMT), pumpkins (708,000 MT), squash (508,000 MT), and garlic (248,000 MT).

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USDA Gain report “Russia: Vegetable Prices Keep Rising

Click here to read more news about the Russian market. 
 

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Tough time for Israeli citrus market, says USDA

The Israeli citrus market's export value has been negatively affected by external shocks and unfavorable weather, reports the USDA.

External shocks and adverse weather have rocked the export market for Israeli citrus, according to a report by the US Department of Agriculture.

The Israeli shekel has strengthened about 10% against the Euro in the last year, making Israeli citrus exports less profitable in the EU, a market to which two-thirds of its citrus exports go.

The Russian financial crisis is also hurting Israeli citrus exports. The rapid depreciation of the ruble against the shekel has brought trade to a standstill since February. And exports to Japan have also taken a hit due to economic slowdown there.

Israel is consequently increasing its exports to long distance markets, mainly South Korea, the US, and Canada, the USDA said. “However, these markets remain small with the US and the Canadian markets capturing 3-4% of the total Israeli citrus exports.”

Meanwhile, in January, about 6,000 ha. of citrus were damaged due to hail storms and winds estimated to have caused overall damage worth NIS 70 million ($17.7 mil) to Israeli agriculture, affecting thousands of acres of avocado and citrus crops and some row crops in the south. The citrus damage would have been worse if not for the protective nets used in groves. “Despite the weather disturbances, export quantity was not affected significantly and this is mainly to a good crop and that made up for the weather,” the USDA said.

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Israel’s best seller in citrus is the Orri mandarin, an easy-peeler which accounted for about 40% of Israeli citrus exports (64,478 tons) in the 2014/15 marketing year and mainly goes to the EU and. “Orri is still profitable, but it’s just less profitable per unit than it could be and this is due to the weakened Euro,” the USDA said.

“Orange exports in MY 2014/15 have declined marginally compared to the previous two years because of strong domestic demand (see table).  The decrease in grapefruit exports in MY 2014/15 is mainly due to the fact that about 1,100 ha of red grapefruit (star ruby and Rio-red varieties) were uprooted in the last 3 years due to low profitability,” it said.

Source: “External Shocks and Weather Conditions Challenging Citrus Revenues” a Global Agricultural Information Network (GAIN) report by the USDA’s Foreign Agricultural Service (FAS) 

Image: “Lemon Orchard in the Galilee by David Shankbone” by David Shankbone (attribution required) – own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons.
 

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Updates from the Russian Federation

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News briefs from around Russia

Chinese investors come to Caucasus
The government of Ingushetia (a Federal Republic in Caucasus region) agreed to lease 100 ha of land for Chinese investors who are going to grow fruit and vegetables there and build a modern logistic centre, M. Malsagov, general director for investing development, told the Ria Novosty news agency. Ingushetia had previously signed an agreement with Chinese businessmen for their participation in the development of various projects in the republic.

German farmers lost more than €600 million
German farmers affected by the Russian embargo have incurred direct losses of more than €600 million, according to estimates from DBV, the German Farmers’ Association. There are also indirect losses related to the oversaturation of the domestic market and pricing pressure, reports the Agriacta agency.

New B2B platform in Tula region
Magnit, Russia’s largest food retailer, is cooperating with the authorities of Tula region for a project “catering saving purchase”. Thus, Magnit may become a competitor to Metro C&C, says the Vedomosti.ru agency.
Magnit has For several years been developing related businesses, producing vegetables, greenery, spices, dressings, dry fruit, berries and herbs.
Founded in 1994, Magnit is headquartered in the southern Russian city of Krasnodar. As of March 31, 2015, it operated 28 distribution centers and over 10,000 stores (8,581 convenience, 300 hypermarkets, and 1,239 drugstores) in approximately 2,180 cities and towns throughout 7 federal regions of the Russian Federation.

 

NV

 

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Recent impact of Russian ban on prices for certain EU produce

European Commission presentation on the impact of the Russian import ban on prices for certain fruits and vegetables.

There’s been an upward trend for mushroom prices and stable prices for pears, carrots, kiwis, and oranges and lemons in the EU, according to the European Commission.

But the price situation for tomatoes and peppers has been mixed and there’s been a downward trend for apples.

That’s according to a presentation on the impact of the Russian import ban on prices for certain fruits and vegetables which the Agriculture and Rural Development Directorate made at the February 17 meeting of the Committee for the Common Organisation of the Agricultural Markets.

Hightlights of the presentation include:

MARKET UPDATE

Apples
Prices decreased in the two Member States with the lowest prices (-6.8% to 20 EUR/100 kg in PL and -4% to 26.6 EUR/100 kg in DE).
Pears
Prices registered stability (current prices are 8.8% under the historical average).
Citrus

Prices over 3-year average (22.2% higher for oranges and 6.7% for lemons).
Tomatoes

Significant price reduction in IT and moderate in ES (current average for tomatoes is 9,8% above the 3- year average).

MARKET CONTEXT

Exchange rates of Dollar to both Euro and Zloty: extra-EU exports and opening new export markets more attractive, helping to restore market balance.
New export destinations: The US has lifted an old ban on imports of French apples and pears from, following a bilateral agreement on sanitary controls.
Lower supply in Southern EU due to adverse weather conditions and low temperatures: Positive impact on prices.

SUMMARY MARKET SITUATION

Positive trend:
Mushrooms (downward trend reversed last week)
Price stability:
Pears (BE price = 46.5)
Carrots (lowest prices in NL & PL)
Kiwis (prices much higher than 3-year average)
Oranges & lemons
Downward trend:
Apples (20 EUR/100 kg in PL and 26.6 in DE)
Mixed situation:
Tomatoes
Peppers
 

 

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source:
Evolution of EU prices of certain F&V
European Commission DG Agriculture and Rural Development Directorate C. Single CMO, economics and analysis of agricultural markets

 

 

 

 

 

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Russian ban spells shrinkage in apple trade

APPLES red - Edited

Global apple crop will also contract this year – to just under 71 million tons – despite bumper season in the EU, USDA projections show

Global trade in fresh apples is set to drop more than 5% in 2014/15, mainly due to Russia’s ban on fruit from certain countries, says the US Department of Agriculture (USDA). Indeed, Russian imports will likely plunge 27% on the previous marketing year, to 800,000 tons, the USDA’s Foreign Agricultural Services forecasts in its “Fresh Deciduous Fruit (Apples, Grapes, & Pears): World Markets and Trade” report.

Imports from other countries are not expected to replace these volumes due in part to the devaluation of the rouble, a slumping economy, and rising inflation in Russia, it said. EU apple imports are headed downwards, too. The USDA predicts a drop of 12% on last season, to 550,000 tons, “as increased output and the effect of the Russian ban saturate the domestic market.” And apple imports into the US are also predicted to slide, in this case by 11% to 190,000 tons.

Growth in Mexico, Canada, India, Brazil and China

But on the positive side, growth on 2013/14’s imports is expected in Mexico, Canada and India, with respective volumes of 260,000, 225,000 and 200,000 tons. The USDA data also shows Brazil’s apple imports (for which Argentina and Chile are usually the main suppliers) had a growth spurt from 94,000 tons in 2012/13 to 117,000 the next year and are expected to surge to 150,000 this marketing year as production in Brazil stays at about 1.33 million tons. And in China, apple imports are set to rebound to earlier levels – about 40,000 tons – thanks to higher domestic prices making imports more attractive and the re-opening of the market to Washington state apples.

Read more on page 93 of edition 135 of Eurofresh Distribution magazine.

 

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Russia claims Israeli pepper shipment poses pest risk

Russia’s veterinary and phytosanitary authority Rosselkhoznadzor says more than 25 tons of peppers from Israel were detained at the Black Sea port Novorossiysk due to fear of the spread of the western flower thrip.

Russia has blocked the import of more than 25 tons of peppers from Israel, saying they pose a risk for the spread of western flower thrips.

The Russian veterinary and phytosanitary authority Rosselkhoznadzor said the move followed inspection at its main Black Sea port Novorossiysk, in the region of Krasnodar Krai.

In a statement in Russian on its website, it said the peppers had been detained to prevent the introduction and spread of the pest in the Russian Federation.

The authority also said that in the year to date, quarantine officers in Krasnodar Krai and the Republic of Adygea have already detained 4 pepper shipments, totalling more than 60 tons, because they did not did not meet Russia’s phytosanitary requirements.