The Russian government has announced that it is to extend its embargo on imports of food from the US, the EU, Norway, Australia, Ukraine and Canada. The ban has been in place since August 7, 2014 regarding products from the US, the EU, Australia, and will now be extended until December 31st 2020. The measure is a response to economic sanctions imposed by other countries on Russia in protest at its annexation of Crimea. Other non-food goods are also included in the respective bans. Russia recently lifted the ban on imports of Turkish food products following a thawing of relations between the two countries. Russia has invested heavily in glasshouse technology in recent years to ensure a larger domestic supply of agricultural produce.
The apple stocks as per 1st December in the European Union, reported by the World Apple Association, show a small decline of 1.4% in availability, though the 5.1 million tons of apples stored is still the second largest registered at that date. November sales were slow and the Russian embargo was hurting Polish exporters.
This year, it is more difficult to pass the Belarus borders and exporters are not taking any more risks of Russian customs agents destroying the produce.
In Italy there are also large quantities available of about 1.5 million tons, but they have the capacity to place the fruit over the season, although the war in Libya is hindering exports. Last year, the Far East markets looked promising, giving hope that the drop in oil prices may keep imports in the oil exporting countries on track.
The French stock was at 15% or 625,000 tons.
A good local market and exports to far away destinations will help to place this volume at a reasonable price.
As for the varieties, red apples gained in market share since the consumer prefers them. Big promotion programmes, free distribution and the school fruit scheme will be welcomed.
The competition in the export markets will not be hard, as US stocks of fresh market apples on 1st January were 1.2% lower than last year at the same time. The January total was similar to the five-year average of 90.7 million bushels, according to the January Market News report from the US Apple Association.
This article appeared on page 86 in the News section of edition 141, Jan/Feb 2016, of Eurofresh Distribution magazine. Read that issue online here.
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.
Volumes per country and product under the additional temporary exceptional support measures for producers of certain fruit and vegetables laid down by the European Commission in its regulation on September 29 this year.
European Commission says additional targeted support measures cover mandarins
About half of all mandarin exports from Croatia’s Neretva Valley ended up in Russia, last year. This year a record harvest of 80,000 tons is expected but many growers risk going bust due to the combined effects of the Russian embargo and an already difficult economic context, according to Croatian member of the European Parliament Davor Ivo Stier (PPE).
Stier said it will be hard for them to find alternative markets in a short period. The total value of the mandarin market in Croatia is roughly €50 million and an estimated 10,000 people there depend on mandarins as a main or additional source of income.
“A large amount of money has been invested up to this point in production materials,” Stier said. “As a result of these investments and of people’s hard work, this year it was anticipated that revenues for the sector would amount to €30‐40 million. However, Russia’s embargo, coupled with an already‐difficult economic situation, could result in many mandarin producers collapsing.”
In answer to Stier’s questions about the mandarin growers’ eligibility for exceptional support from the EU agricultural crisis fund for the effects of the Russian sanctions, Agriculture Commissioner Dacian Cioloş said on behalf of the Commission that there is now support for mandarin growers.
Support for citrus producers was not included in its initial exceptional market support measures. “However, the Commission has prepared additional targeted support measures for fruit and vegetables hit by the Russian ban taking into account new harvest and export seasons. The new measures include mandarins and (were) published on 30 September,” Cioloş said.