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LTO pleads for opening Russian market and less government interference

Russia in Dubai looking for alternative markets

Although we hear weekly about the destruction of European fruit and vegetables, we rarely hear about non-EU food; until Friday, when the Russian phytosanitary service announced the destruction of illegal nectarines from Australia. The cargo, containing 1,300 kilos of nectarines, was reported to be affected by brown rot. Last week, there were also destructions of fruit and vegetables from Turkey, Poland and Spain, subject to the Rosselkhoznadzor policies.



Russian population thins out
The research firm Stratfor does not have good prospects for Russia in the next 25 years. According to the report 'Russia and the West, A 25-year forecast', there will only be 129 million Russians in 2050, down 10% compared to the current 143 million. Conversely, the U.S. population is expected to grow by 20% over the next 25 years, from 322 million to 389 million people.

The trend in the countries of the former Soviet bloc appears to be the same and they are expected to unite to secure their monetary, economic and political interests. Due to recent developments, Russia will likely not take part in that process.

Ukrainian radicals want to continue with logistics boycott
In Ukraine, the conflict between radicals in Kiev and Russian transporters has not been alleviated. On Friday, the retained Russian carriers were able to go home and the worst seemed to have passed. Ukrainian activists, however, are likely to continue the blockade after 25 February if the government does not take action against economic activities of Russia in Ukraine.

Queues in the Baltics
On Monday, Belarusian border guards reported a tense situation on the border with Lithuania, where about 700 trucks were standing still. On the western border, 130 trucks had to stop around 10 pm and another border crossing reported a queue of 30 trucks that had to wait for six hours for further orders.

Trucking from Poland to Russia is delivered in Lithuania, after which it is transferred to trucks with a Russian license plate. An arrangement which seems to benefit Lithuania considerably.

The situation started on 1 February, when Russia and Poland were unable to agree on freight between the two countries. Since then, the truckers have to bypass the limits and reach each other's countries through the Baltic states, Hungary and Slovakia.

Belarus
Russia, according to the Stratford report, has also little to expect from Stalinist brother Belarus. Political and demographic trends are calling "Europe's last dictatorship" to seek other allies. The gap left by Russia will be filled by Turkey, which is gaining more influence, with an explosive population growth in Central Asian countries, which have a population consisting of ethnic Turks. On the other hand, China continues to gain influence.

Asia
Russia is also aware of the rise of Asia, and the Kremlin sees the pseudo-communist People's Republic and South Asian countries as good markets for agricultural products, as stated by minister Tkachev on Sunday to journalists at the Gulfood trade fair in Dubai. In order to strengthen its relations in Asia, the Federation consequently plans to send delegates to the agricultural fair in Shanghai next month. During the interview, the minister also mentioned the United Arab Emirates as a good alternative to the Turkish market.

The Turks are now in a far from ideal situation, as 80% of the harvest of the famous Karyagdi pear has had to be kept in cold storage due to the lack of markets. Last year, this fruit's sales generated around 140 million Turkish liras (€ 43 million), but now they will have to be sold at a cheaper price. With a production totalling 413,000 tonnes, the Karyagdi accounts for about 25% of the country's pear production and is normally sold in Russia, Iraq and Syria.

Turkey must also try to promote tourism
The recent attacks and the shooting down of a Russian fighter jet have also taken a toll on the tourism sector. According to the Moscow Times, there are now 1,300 resorts for sale on the Turkish coast. Last Monday, Turkish Prime Minister Davutoğlu presented a support package totalling 255 million lira (78,389,179 Euro) and stated he could only hope that Russian tourists kept coming to Turkey for some sunshine.

Russians apathetic about economy
While Turkey is worried, Russia is not benefiting either from the colder relations. The Center for Strategic and International Studies (CSIS) expects the Russian economy to shrink by 2 to 3% per year. Despite these unpromising figures, Russia will continue spending money on weapons instead of workshops.

According to economist Vladislav Inozemtsev, the Russian people do not have much resilience either to revive the economy. "Russians accept the bad economy as a situation that they cannot change themselves and the government continues to blame the West for the current situation. The survival tactics of this tough population are mainly individualised and have no political vitality. Even if the sanctions were lifted tomorrow, I do not expect many banks to rush back to Russia."

LTO and European partners insist on end of Russian boycott
Yet Albert Jan Maat, of LTO, continues defending the opening of the Russian market. "The Russian ban on agricultural products remains a dark cloud hanging over the market. Commissioner Phil Hogan can travel around the world to open new markets, but I believe Moscow should be on the top of his list of possible destinations."

He was backed by Polish, German, Spanish, Austrian and other colleagues. The LTO leader also made an appeal towards the big European cooperatives. "The cooperatives are the ones who market our products. They must take the lead together with us in analysing the market and the supply of our products."

Furthermore, Maat made a call to Martijn van Dam, State Secretary for Economic Affairs, now chairman of the Agriculture Council, to request his collaboration with the industry and work for the achievement of a strong market for agricultural products.

"Any kind of government interventions, for example, by raising dairy produce intervention prices, will only ruin the market further. I am also counting on a strong European Council focusing on the issues that they need to address to ensure a level playing field for production in Europe, export promotion and political stability in the world," stated Maat. "The rest of the industry regulates itself well."

Southern Hemisphere
Meanwhile, South Africa sees opportunities in the Russian market. On 29 February, entrepreneurs from the drought-stricken country travelled together to Yekaterinburg to present their products to potential customers. Last year, the Sverdlovskoblast made imports of South African products worth $ 19.7 million (17,897,701 Euro).

On the other side of the Pacific, Russia is looking for customers in Uruguay and Argentina's top fruit and citrus are also on Russia's wish list.

Rich kids
Lastly, it is possible for fans via Instagram to take a look into the life of the Moscow elite, who spend their roubles on toys for their children, and besides selfies with Russian politicians, they seem to show little more than excessive luxury and are glowing with confidence.