Strong decline in Russia's fruit imports

The international market still poses serious difficulties for fruit producers in Argentina's Valley of Rio Negro and Neuquén.

Official data from the site "Fruit & Vegetable Facts" reveal that last year Russia imported 5.49 million tonnes of fruit; a drop of around 650,000 tonnes in nominal terms and of 10% in relative terms. This clearly shows that the embargo on the West could not be offset with imports from other third countries.

The figures are even more significant when looking at interannual variations for the period between August and December.

Statistics highlight that during the last five months of 2014, Russia's fruit imports totalled 2.14 million tonnes, 18% less than in the same period of 2013.

On the one hand, the lack of supply on the shelves caused a sharp increase in prices, which in turn slowed down consumption. This drove prices to stabilise, given the deteriorating economy.

The devaluation of the currency, which went from 35 Rouble per dollar in March last year to 64 Rouble last week, was another factor that significantly affected fruit trade in the Eurasian giant. The prices to be agreed on with Russian importers are not the same as last year. Many of them went bankrupt after the debacle caused by the currency's sharp devaluation. A large Argentinian fruit exporter based in the Valley was affected by this in the second half of last year, as it didn't receive the due payment for a shipment of fruit that went to Vladivostok.

"Argentinian pear sales to Russia plummeted by 50%, and the situation is expected to be even worse for apples," stated a major regional exporter when asked about the issue.

The first pear shipments that arrived in St. Petersburg this season were sold for 1,800 Rouble per box (about 28 dollars at this week's exchange rate). But prices only remained at this level for a few days; later, they dropped and today Argentinian pears are being sold for between 1,550 and 1,650 Rouble. "Below 1,600 Rouble, we start losing money in this market, and it all points to prices continuing to fall in the short term."

Bananas are currently Russia's most imported fruit. Last year, the country purchased 1,274 million tonnes, which represented an annual decline of 5%.

Apples are the second most important product. Statistics of Fruit & Vegetable Facts show that purchases from third countries amounted to 1,039 million tonnes, a 22% drop compared to 2013. In absolute terms, import volumes dropped by more than 300,000 tonnes.

When looking at the period between August and December of each year, the figures are even more worrying, because they show the effects of the trade war between Russia and the West. During that period last year 249,000 tonnes of apples were imported, compared to the over 450,000 tonnes of 2013. Consequently, 85% of the total drop in imports in 2014 is accounted for by what happened during the last five months of the year.

But for most exporters, the official statistics do not actually reflect the reality of their transactions.

We are talking about irregular trade currently taking place in Russia. An important part of the fruit consumed in Moscow and its surroundings enters via third countries that are partners with Putin, or simply by smuggling.

This volume, estimated at no less than 10% of what is currently imported, eventually takes a toll on the market of the Eurasian giant.

As shown in the charts, the countries affected by the boycott hardly exported any apples to Russia during the last five months of 2014. Poland, traditionally Moscow's largest supplier, abruptly halted its shipments.