From both European and Russian sides, careful signals are being heard about relaxation of the sanctions. Russia is convinced that the sanctions will be lifted, but doesn't mention a time schedule. President Hollande says he's willing to discuss the sanctions, if the talks this week in Kazakhstan about the conflict in Ukraine produce a positive outcome. And the German minister of Agriculture says that a relaxation of the sanctions would benefit relations between Berlin and Moscow. Last year, Serbia and Azerbaijan became important apple suppliers for the Russian market. The top three apple exporters to Russia are Serbia, China and Azerbaijan. Russia's plum import decreased significantly, because Russia has boycotted the import of fruit and veg from Moldova. And in Ukraine, prices for vegetables went down. Import fruit prices rose significantly.
Positive signals
Russian minister of Foreign Affairs Lavrov confirmed to the press that the government is convinced the sanctions against Russia will be lifted. Lavrov thinks there is room for both parties to come to a partnership on equal footing. Incidentally, Lavrov didn't give an indication of a time period in which he expects the sanctions to be lifted.
French president Hollande said that the European sanctions could possibly be lifted if progress is made during a summit about the situation in Ukraine. An EU document supports this European attitude in the debate. Although the document was only drafted to feed discussion, it is the first time that the EU mentions relaxation of the restrictions.
The European sanctions against Russia also have a downside. Although the Russian economy is going through tough times due to the sanctions and the decreasing oil price, European companies are also facing the immediate consequences from the European sanctions. Russian companies are unable to pay the bills, or the transactions are stopped at boycotted banks. The German minister of Agriculture is asking Russia to relax the sanctions. According to the minister, relaxation of the sanctions against German products can improve relations between Berlin and Moscow.
Although these are positive signals, that doesn't mean the end is in sight for the trade war.
Fruit and veg 31% cheaper in Ukraine
The price index for fruit and vegetables went down by 31.1% over 2014, compared to 2013. The decrease is accounted for by traditional vegetables. Fruit became more expensive. The consumption of these vegetables lagged behind. Combined with a good harvest, this brings down prices. The sharpest decline was for the onion, however, which lost 67% of its value. For beets and carrots, prices went down by 41% and 25% respectively. Potatoes got 60% cheaper. Prices for greenhouse vegetables also went down, due to a large part of the Russian market being lost. About a third of tomatoes, and a large part of the cucumbers from Ukraine were destined for Russia.
Price increases for fruit were mainly accounted for by imported fruit, which became 90% more expensive. The increase was caused by the weaker position of the hryvnia. The average price increase for fruit was 75%.
Serbian apple export +70%
Because of the boycott, Serbia is able to significantly increase the apple export to Russia. Serbia has exported 61,700 tonnes of apples to Russia since the beginning of the 2014/15 season. That's 70% more than in July-November 2013, and a record for the past five years. The weaker rouble does mean demand is under pressure though.
The apple export from Azerbaijan to Russia has also increased. The country exported 33,000 tonnes of apples during the first five months of the 2014/15 season. That puts Azerbaijan in third place, behind Serbia and China.
Russia decreases plum import
Russia has significantly lowered the import of plums, official statistics show. The counter showed a total of 41,000 tonnes in November 2014. That's 45% less than over the same period in 2013. According to a Russian importer, the boycott of Moldovan fruit and veg is largely to blame for the decrease. Normally, the import from this Eastern European country gets going in August, but this year that wasn't possible due to the boycott. Moldova supplied around 35% of the Russian plum import in 2013. For 2014, Moldova's share is stuck at 0%.