Moldova is facing big problems. The country saw the export increase in the first months of this year, mainly to Russia, but is now being hit hard by the Russian boycott. Because the country isn't an EU member, it's on its own. Moldova is working hard to meet Russian demands, and reports say that the sanctions could be lifted if Moldova meets the Russian demands. On the other hand, the Russians are threatening to boycott Ukraine if Moldovan produce enters Russia through that country. In several regions, large investments are made to increase production, in order to become self-sufficient. And to promote import, import duties for Turkey have been lowered, Egypt is trading fruit and vegetables for grain, and Pakistan is visited to look at the possibilities.
Russia imports more from Morocco
According to the Russian Agriculture minister, import from Morocco has risen dramatically. During the first seven months of this year, more agricultural produce is said to be imported from the North African country, than during the whole of 2013. Morocco is a large supplier of fruit and vegetables for the Russian market, with around 70% of its export consisting of fresh produce. In turn, Russia is an important supplier of grain to Morocco.
Egypt trades fruit and vegetables for grain
The Russian region of Omsk, near Kazakhstan, wants to further increase trade relations with Egypt. Representatives of Omsk and Egypt recently met to discuss long-term contracts. Omsk wants to export grain to Egypt, and import fruit and vegetables in return.
Moldova exports 38% more
Over the first six months of this year, Moldova exported 256.2 million dollars in fruit and vegetables. Thus, fresh produce accounted for a fifth of the total export, and compared to the same period in 2013, export of crops was 38% higher. The increased export is mainly caused by an increase of grain export. Apples, pears and grapes were exported less. The most important export market for Moldova is Russia (16%), followed by Turkey (12.4%), Ukraine (7.8%) and Romania (7.5%).
Moldova aiming for lift of ban
If Moldova can meet Russia's phytosanitary demands, Russia is prepared to lift the ban on Moldovan produce. Moldova is having a hard time finding a market for apples, for instance, causing the government to spend a lot of money for compensation. Moldova is not an EU member, so it's on its own when it comes to compensation plans. The Moldovan ministry of Agriculture reacted enthusiastically, and promised to work hard to prevent re-export of European products. Moldova grows around 300,000 MT of apples, of which 93% was exported to Russia. The EU increased the apple quota for this year from 40,000 MT to 80,000 MT.
Ukraine transit hub Moldovan fruit
Whether the ban on Moldovan produce will be lifted, is still uncertain. Last week, Russian authorities threatened to boycott Ukrainian products, including apples and grapes, for fear of re-export of Moldovan fruit. According to the Russians, Moldovan products do not meet the phytosanitary demands, and to prevent the products from being exported to Russia through Ukraine, the Russians are threatening a ban on Ukrainian fruit.
Krasnodar Russia's granary
In the south of Russia, on the borders of the Black Sea, the Krasnodar region is located. The regional government has high hopes for the agricultural potential of the region, Kuban in particular. The climate is favourable, and Kuban is seen as the leading agricultural region of the country. Tomatoes from Kuban are reportedly sought after even in the Ural and Siberia. Moscow and St. Petersburg are also seeing increasing demand for products from the region. Since the boycott, more is being invested in fruit and vegetable cultivation in the region. Krasnodar is self-sufficient, and still has produce left over to supply to other regions.
Rostov wants year-round cultivation
North of Krasnodar, the Rostov region is located. The region wants to increase fruit and vegetable cultivation by 80,000 MT. The construction of 6 greenhouse centres has to contribute to getting through autumn and winter with own cultivation. According to official figures, Rostov is 32% self-sufficient in fruit, and completely self-sufficient in vegetables. Shortages are complemented with import from Turkey, Egypt and Israel.
The centre, spanning 16 hectares, will have to make the region completely self-sufficient. The production volume of the greenhouses is estimated at 9650 MT per annum, with the project costing 1.8 billion roubles (36 million euros).
Less import from non-CIS countries
According to Russian customs, the country imported 15.6% less in August from countries that aren't a member of the Commonwealth of Independent States, than in July. The Commonwealth of Independent States comprises 9 former Soviet republics. The consequences of the boycott are clearly seen in the import figures, with fruit and vegetable import going down sharply. Compared to July, 73.2% less was imported than in August.
Lower import duties for Turkish products
Turkey indicated earlier their desire to triple export to Russia compared to 2013. With that, the export should amount to 3 billion dollars. That goal is attainable, according to the Turkish exporters organization. A barrier could be formed by import duties that have to be paid, but those are being lowered now. Turkey imports roughly as much grain from Russia each year as the country exports food to the Russian market; 3 million tonnes.
Russia supports Pakistani export
A delegation of 20 Pakistani exporters visited World Food Moscow. The Pakistanis were able to convince the Russians that their produce has a lot of potential, and recently a lot of progress has been made to meet EU demands. With that, Pakistan was able to prevent an EU boycott. The Russians are now interested in the steps taken, and opportunities to import more produce from Pakistan. The country is mainly able to supply mandarins and potatoes to Russia.
Mushrooms new growth market Russia
Soon after the introduction of the ban, rung mushrooms were already showing up in Russian supermarkets. Most of the mushrooms on the Russian market are imported, including from Poland. The domestic mushroom cultivation is relatively small and expensive. That's mainly caused by the high costs for compost. The Russian growers import compost from European countries, but because of that, 50% of production costs is spent on compost. For Poland, for instance, that percentage is 25-30. Russian investors are now getting into mushroom cultivation. Mushroom consumption is high in Russia.
Africa most interesting supplier
Several African countries are interested in export to Russia. Apart from Egypt and Morocco, which repeatedly indicated a desire to increase export and are in talks with the Russians, Kenya and South Africa are also interested in this market. Although South Africa is exporting a lot to the EU and the Middle East, Russia is the biggest country being exported to, with 12% of the export. The Russians are interested in importing more citrus, grapes and apples from the African country. Trade with Kenya mostly consists of coffee and tea at the moment, but the Kenyans hope that the sanctions will open a new door for them. Negotiations are reportedly going smoother, and import duties would be lower, which is favourable to Kenyan exporters.