The Russian economy has contracted in the first quarter. Prices for cabbage, onions and carrots have sharply increased. During a meeting between Russia and the U.S. last week, Lavrov gave potatoes and tomatoes to his American counterpart John Kerry. Several countries, including Uzbekistan, Jordan and Azerbaijan, are in negotiations for export requirements. Dutch growers are making little use of the EU compensation funds. Top fruit growers didn't use even half of the budget. Russia announced that, since the beginning of this year, 5,900 tonnes of fruit and vegetables have been intercepted whose certificates were not in order. According to Russia, there were 3.5 times more interceptions over the past few months than in the first months of the boycott.
Russia's economy shrank in the first quarter
In the first quarter of this year, the Russian economy shrank by 1.9 percent compared to the first quarter a year earlier. The decline was in line with expectations of both the Government and economists. On the plus side we have the stabilisation of the Rouble and the recovery of oil prices. Various estimates predicted a contraction of several percentage points, which now appears to have been too pessimistic.
Dutch growers make little use of rescue fund
Especially apple and pear growers in the Netherlands appear to have made little use of the compensation fund made available by the EU, reports BNR. Around 2 million Euro were distributed amongst producers, which is not even half of the available budget. The main reason is the low compensation offered: about 15% of the cost. Market prices are above this compensation.
5,900 tonnes fruit and veg intercepted in 2015
The Russian phytosanitary watchdog has published figures on the number of interceptions of illegal imports since the start of 2015. The authority stopped 5,900 tonnes which had been introduced in the country via Belarus. 302 fake certificates were found. In 129 cases, certificates were allegedly from Turkey. Another 78 certificates claimed that the products came from Morocco. Other countries in fraudulent documents were Macedonia (32), Tunisia (28), Serbia (22), Bosnia and Herzegovina (8) and Brazil (5). Between 20 February and 15 March there was a total of 122 interceptions. According to Russia, this is 3.5 times more than in the first months after the boycott's introduction.
Russia intercepted Egyptian potatoes
Last week, Russian customs authorities found sweet potato butterfly larvae in a 439 tonne shipment of potatoes from Egypt. This insect is a serious threat to vegetables, especially potatoes, tomatoes, aubergines and peppers, and developed during storage. According to the Russian authorities, it is not the first time that Egyptian potatoes are stopped. 2,200 tonnes of potatoes have been refused because of the presence of pests or diseases.
Why Lavrov gave potatoes and tomatoes to Kerry
Last week, the Foreign Minister of Russia, Sergei Lavrov, and his U.S. counterpart, John Kerry, held a meeting in Sochi. The talks yielded no concrete agreements on the conflict in Ukraine, Yemen and Syria, although both countries say they want to work on finding solutions. Lavrov, however, gave a basket of tomatoes and potatoes to Kerry; a remarkable gift, which recalls a similar one from Kerry to Lavrov in Paris in 2014. Back then, the ministers met together to discuss the Syrian conflict and Kerry handed two large sweet potatoes from Idaho to his Russian colleague. According to Kerry, this had no symbolic value, but it was done simply because he knew Lavrov had seen the large potatoes during a holiday in Idaho.
Cabbage prices going through the roof
Cabbage prices in Russia have sharply increased. According to official figures, the rise in prices is of 97.59% since July last year. While in July 2014 a kilo of cabbage cost 20.73 Rouble (0.42 dollars), at the moment the price stands at 40.96 Rouble per kilo (US $ 0.83). According to Russian media, the price could have increased by even 400% in some supermarkets. Cabbage is an important ingredient in Russian cuisine and was mainly imported from the EU. In 2013, 75% of the European cabbage exports went to Russia.
Other vegetables, such as onions and carrots, also register price increases. Carrots have become 78% more expensive since October, while onion prices have increased by 85%.
Azerbaijan and Russia negotiate export prices
Since early this month, negotiations have been underway between Azerbaijan and Russia on the tariffs payable for the export of fruits and vegetables to Russia. If the negotiations are successful, the costs for exporters could be halved. Under the agreement, inspections of one country would be automatically taken over by the other country. The agreement would apply to vegetables, fruits and nuts.
Israeli exports Russia increase
Figures revealed by the Russian Minister of Agriculture, Andrey Volkov, revealed that Israel increased its exports to Russia. Russian imports from Israel last year amounted to $ 444 million, 2.6 percent more than in 2013. This positive trend continued in the first months of 2015. Russia expects a growth of between 2 and 3 percent. The stabilisation of the Rouble is an important factor in increasing trade.
Uzbekistan invests in trading in Russia
The Uzbekistani company Fergana Fruit Invest has plans to invest in a trading house in the Russian region of Perm. The subsidiary has already registered with the Chamber of Commerce. The region already purchases a lot of fruit and vegetables from Uzbekistan. The Uzbek Government is also encouraging companies to do business across the border with interest-free loans.
Jordan is working on relations with Russia
The Jordanian Minister of Agriculture visited Moscow last Sunday to talk again about export opportunities. The Middle Eastern country wants to increase exports to Russia and therefore ease the customs regulations. Russia is interested in fruits and vegetables from Jordan, among other products.
Carrefour returning to Russia?
According to recent reports, the international retail chain Carrefour plans to return to the Russian market. The UAE-registered Majid Al Futtaim Retail LLC, which Carrefour introduced in the Middle East in 1995, has allegedly already met with the Government of the republic of Tartarstan. This would put an end to the supermarket's five year absence in the Russian market.
Ukrainian cherry growers expect problems
As expected, the cherry campaign has started this week in Ukraine. Growers are concerned about the coming season. Russia was a big market for cherries, but it is unclear whether the market is still open for the fruit and exports to the Crimea will not compensate. Furthermore, as a result of increased logistics costs, growers are afraid that the cherries won't be competitive in terms of prices. Analysts are more optimistic. They point to the importance of imports for Russia due to shortages in domestic production. Additionally, the currency's low rate may provide a competitive advantage to Ukrainian producers. Thus, Ukrainian cherries will be cheaper than its competitors from Turkey and Europe.
Apple prices Ukraine reached record
Average apple prices in Ukraine during the 2014/15 season have reached their highest point in the past five years. The average price between June 2014 and May 2015 exceeded 8 hryvnia (34 cents) per kilo. In the previous season, the price was 5 hryvnia per kilo, and five years ago it stood at 6.5 hryvnia per kilo. High demand from exporters pushed prices up at the start of the campaign. Early in the spring there were shortages, so import apples consequently played a significant role in the market.