Russia: Sharp increase of mushroom and pepper prices

A group of countries, including India, Brazil, Kyrgyzstan and Serbia, appear to be benefitting from the Russian boycott. Sanctions are lifted, contracts and demand for their products increases. In Moldova, traders are relieved. Russian imports are shifting to former Soviet republics and the sanctions still seem to have caused little damage. This is different in the EU, particularly Hungary, which registers daily losses of nearly 300,000 Euro. Russia itself has registered sharp increases in mushroom and pepper prices, but heavy investments are being made in domestic production. 

Last week, Kyrgyzstan was still lobbying at the Eurasian Economic Union to be granted access to Russia's fruit and vegetable market, and was eventually successful. Kyrgyzstan wants its export volumes to Russia to increase to the level of 2008: 195,000 tonnes. In recent years, this volume had dropped from 13,700 tonnes in 2012 to 7,500 tonnes last year. 

The Ministry of Agriculture of Kyrgyzstan has great prospects for exports. Some figures mentioned include: 15,183 tonnes of tomatoes, 10,830 tonnes of onions, 50,980 tonnes of potatoes, 11,013 tonnes of apples; grapes, 41 650 tonnes; melons (cantaloupe and watermelon) 3,020 tonnes; nuts 76.2 tonnes; 193 tonnes of dried fruit and 172.5 tonnes of canned vegetables.

Kazakhstan also registers greater demand from Russia. The country is investing in intensive family fruit farms with an area of ​​5 hectares. This year, 100 hectares of such plantations will be funded with an expected yield of 4,000 tonnes of apples. 

India and Brazil 

Indian trade is also to benefit from the sanctions, according to Tarun Arora, exports director of the organization IG International. While competitors are no longer allowed access to Russia, the doors are now open for Indian exporters and importers. The country receives increased Russian demand for potatoes and grapes, and additionally, other European countries are queuing to be granted access to the Indian market.

Russia lifted trade restrictions to the Brazilian meat sector. This gave the country further access to the Russian market. The majority of Brazilian exports to Russia consist of meat.

The EU licks its wounds 

EU countries are looking for new markets, with all eyes set on the Middle East and Asia. Indian and Chinese traders are allegedly already negotiating with European producers of fruit, meat and cheese. The Committee on the Common Organization of the Agricultural Markets, an EU body, said last week that a budget of 29.7 million Euro was available for peach and nectarine growers willing to to give the fruit away for free, and an additional 3 million has been set aside for promotional purposes. The bulk of the funds will go to Italy, Spain, Greece and France. 

Poland seeks access to the American market for its fruit and vegetables. The Polish government is looking for ways to meet the import requirements of the United States, as apples in particular need to be shipped to this market. 

The Hungarian agricultural sector registers daily losses of 295,000 Euro because of the sanctions. The Hungarian industry is as vulnerable as Poland's or Greece's, although the Hungarian Minister hopes that exports will increase. 

The grape harvest is estimated at 100,000 tonnes, and how much of this will be exported will depend on the quality. The main export destination is the Commonwealth of Independent States. White grapes are especially popular in Ukraine and Belarus, which are also the largest markets for the grapes. Russia demands especially the blue varieties, which are not affected by the ban. In the list of largest grape exporters to Russia, Moldova stands second, behind Turkey. Because European growers switched to the white varieties, Moldovan blue grapes are also popular in the EU. 

The Russian retailer Dixy announced an increase in the import of fruit and vegetables from Serbia. The supermarket chain, with more than 2,000 stores, was already importing small volumes of Serbian produce. In response to the sanctions, the chain aims to increase this volume. The contracts are expected to be signed in the short term.

While before the ban some Turkish growers were using the label 'Made in EU' as a quality brand, the situation has quickly reversed. European growers are now using the label 'Made in Turkey' to still be able to make their shipments to Russia. The opening of the Russian market also entails an opportunity for Turkish growers to increase their exports. 

Belarus has "plenty available" 

The harvest in Belarus is so good that in addition to supplying the domestic market it will also be possible to export, according to the Belarusian Ministry of Agriculture. The country registers yields of 26 tonnes per hectare for cabbages and 24.7 tonnes per hectare for potatoes, while a year earlier these figures stood at 17.4 and 20.7 tonnes per hectare, respectively. 

It is expected that 200,000 tonnes of vegetables and 1 million tonnes of potatoes will be available for export. Exports to Russia this year will be 40% higher. 

For tropical products, Russia can also resort to the Chinese north-east. In a greenhouse complex, China has managed, despite the cold winters, to grow strawberries, bananas and exotic fruits. Chinese apples, grapes and cucumbers are also already exported to Russia. 

Russia: higher prices and substantial investments 

Meanwhile, the Russian population sees prices growing. Mushrooms have become two Euro per kilo more expensive and now the last Dutch peppers remain on the shelves, whose price has doubled. In any case, the Russians are mostly managing to replace banned products with quality domestic produce. Additionally, new suppliers are also sought to replace these boycotted products.

To increase domestic production, Russia is investing in new projects in different regions. Overall, domestic growers seem to benefit from the sanctions. In Murmansk, a greenhouse complex has been built covering an area of 5.8 hectares that has cost $ 1.6 billion. The project has received plenty of funding from the Government. Cucumbers, tomatoes and herbs will be grown in greenhouses and the first harvest is expected in 2015. 

The Murmansk region expects little impact from the sanctions, with only 3% of the products consumed being banned. The impact for Siberia will also be small, as the region produces the largest part of its food, including tomatoes, cucumbers and peppers, in greenhouses.

In the south of Russia, near the Black Sea, investments have been made in the Republic of Adygea's apple production. The largest orchard (132 hectares) is equipped with an irrigation system and an anti-hail net. The first harvest in 2013 was 7 tonnes per hectare, which in the coming years is expected to increase to 50 tonnes per hectare.