Boycott causes 8.6 billion dollar in losses for West

Russia calculated that the losses caused by the boycott amounted to 8.6 billion dollars for the West. The phytosanitary service also calculated that Russia already destroyed 7,282 tonnes of fruit and vegetables. The country is working on improving its relationship with Turkey, a possible next step is lifting the boycott. However, Russia is now barring products from Bosnia. Furthermore, Azerbaijan and Iran were given many opportunities, and Moldavian companies were once again granted export permits. Far less positively, the companies from Tajikistan claim Russian customers are not fulfilling their contracts. 

The Russian Ministry of Economic Development calculated that the total loss of export for the boycotted countries (US, EU, Canada, Norway and Australia) amounted to 8.6 billion dollars in 2015. Export for 2015 was 96.5 per cent lower than in 2013, equivalent to 8.6 billion dollars. Volume decreased by 98.9 per cent, or 4.3 million tonnes. 

For Albania, Montenegro, Iceland and Liechtenstein, which were added to the list of boycotted countries in August 2015, export decreased by 85.8 per cent, or 91.3 million dollars, between August and December 2015. The NFO calculated that the Dutch sector is missing out on 100 million to 125 million dollars in sales. Concerns about the consequences for the sector are increasing.

The relationship between Turkey and Russia is quickly improving. Talks are being held at governmental level. The lifting of the boycott on Turkish fresh produce is also on the agenda. This week, a report will be presented by the Russian delegation that visited Turkey. On Tuesday a meeting between the two presidents was scheduled so they could discuss the relationship between the countries. 

The boycott of Turkish products resulted in a loss for Turkey of 209 million dollar in the first quarter of this year, according to calculations of the Russian Ministry of Economic Development. Considering the improving relationship between the countries, chances that the boycott is lifted are big. 

Since 6 August 2015, the Russian phytosanitary service destroyed 7,282 tonnes of fruits and vegetables, the Rosselkhoznadzor announced. Most products were destroyed in the Western regions of Russia: Bryansk and Smolensk (over 2,700 tonnes), Tver and Pskov (nearly 1,900 tonnes), Rostov, Volgograd and Kalmykia (over 600 tonnes). Products intercepted most often are apples, pears, peaches, tomatoes, bell peppers, aubergines, strawberries, oranges, tangerines and grapes.

The Bosnian fruit and vegetable sector is facing the loss of millions of Euro now that Russia decided to close its borders due to food safety problems. Russia is concerned about the lack of information on the health of plants, the Bosnian minister refused a Russian inspection. The boycott coincides with the harvest period and many cultivators sold their products to Russian companies under contract. During the past two years, the Bosnian sector focused on the Russian market.

According to the Azerbaijani Ministry of Agriculture, the country will increase export to Russia. During the first half of this year export already increased by 27.5 per cent, the fruit export increased by 13.1 per cent and the vegetable export by 33.1 per cent. According to the Ministry, 7.4 per cent of the Russian tomato market is in the hands of Azerbaijan, while that was only 1 per cent last year. Besides Russia, export to Iran, the UAE, Turkey, Iraq and Turkmenistan is also increasing. 

According to Russian news agency Tass, a resolution, which calls for lifting the sanctions against Russia, for the Belgian parliament is ready to be signed. A debate is to be held after the summer recess, according to initiator Aldo Carcaci. This autumn, a debate has to be held on European level on the future of the sanctions still in power until January 2017. 

The Russian phytosanitary service published a list of 43 Moldavian companies allowed to export to Russia again. The list was drawn up after a visit to the country during which the companies were inspected. On 22 July the first apples, pears, quinces, apricots, cherries and nectarines were exported.

The Iranian province of Mazandaran says it has 500,000 tonnes of fruit available for the Russian market. According to the province, kiwi fruits and citrus are its main products. Iran’s total fruit production is around 3 million tonnes. The Iranian provincial government and the Russian government of the state of Astrakhan talked about the possibilities of packaging the products in the Russian region. In that case, at least the packaging will meet Russian requirements. 

According to the Tajik minister for agriculture, Russian companies are not meeting previously made commitments. Earlier this year, agreements were made about the purchasing of onions and potatoes, but the Russians are not buying the products, leaving cultivators stuck with the losses. Tajikistan already exported 87,000 tonnes of fresh produce to Kazakhstan, Russia, Kyrgyzstan and Afghanistan this year.

Nielsen research shows that 64 per cent of Russian consumers think seasonal products from markets taste better than those bought from supermarkets. Two out of three Russians also think markets offer more choices and have better prices. One explanation for this is that products at markets are cultivated locally or come from neighbouring countries. Expenses for fruit and vegetables decreased during the summer months, partly because many Russians have their own vegetable garden.

Although the prices for fruit and vegetables are increasing, many Russians are choosing to buy fruit and vegetables as a meat replacer. Meat will become a luxury product because of this. The good potato harvest and more favourable exchange rate in the off-season, among other things, partly compensated for rising prices.