The large gap in the offer that left the ban to countries like Poland, force Russian importers to look to the South American market; but several factors could prevent South America to respond quickly to demand.
Stock and high costs
Chile, that because of frost has experienced problems with the calibre of its apples and large falls in volume in the production of fruits like kiwifruit, does not seem to be able to provide in large quantities the Russian market, or at least this season.
"If today Russia demanded apples in large quantities and of a specific calibre, Chile could not meet it," he says. Furthermore, "Russia is not a country that buys fruit of medium or small calibre," adds Andrew Gillon, from Fruit Grower Chile SA.
In this situation, Russian importers are showing increased interest in the Argentinian apple.
"Argentina opened the export market for top fruit from the Southern Hemisphere to Russia about 20 years ago now. It is an established market, but recently it has been a little deteriorated because of our high internal costs," reminds Raúl Ferragut, Press Secretary of the Fruit Growers Federation of Río Negro and Neuquén.
Argentina has an important stock of stonefruit that is usually sold in the domestic market and exported to Brazil, where freight costs are obviously lower.
"The fruit shipments to Brazil are based on stable trade relations, so I see unlikely to divert to Russia a big quantity of fruit this season," said Marcelo Loyarte, Manager of the CAFI (Argentinian Chamber of Integrated Fruit Growers).
Argentina’s domestic market is suffering a deceleration in demand, which would make possible sending quantities "slightly higher" to Russia, as long as a reasonable price is achieved.
Bad experiences and financial locks
Due to bad experiences with defaults issues in the past, Chilean fruit export to Russia is a business of firm sales and advance payments of between 90 and 100 per cent. These features are unfavourable for the importer, since they force the importer to buy large amounts of currency to make the payment before marketing the fruit.
"Next season we will be able to double or triple our exports to Russia, the problem will not be the stock but the ability of importers to buy currency," says Eduardo Ledesma, President of AEBE (Association of Banana Exporters of Ecuador); shipping volumes to Russia are normal, but they are noticing a greater delay in payments.
"Currently banana prices in St. Petersburg are very low so I estimate that shipments will not increase in the short term," said Ledesma.
South American exporters are realistic; they know that the opportunity is clear, but they will not neglect easily its presence in other markets in a situation that does not offer many guarantees.
"We must be cautious. This situation is conditioned by external facts and we do not know how long it will last, " added Marcelo Loyarte.
Cherries
The cherries will leave a gap of 40 per cent of cherries coming from Europe. So that will be an impact – not only leaving Russia short, also creating a surplus in Europe. Here again it is difficult to fill the gaps, as Southern Hemisphere ships in another period in the season then Europe and North America are doing.
