While products from banned countries frequently appear on the Russian market having been rung in Belarus or Kazakhstan, Europe is also dealing with fraud in labels specifying the country of origin. Cypriot growers are complaining about foreign produce being marketed as local produce. And the low food prices caused by the boycott, could have a greater effect on the European economy than previously thought. Decreasing food prices push down inflation. And the Russian plans for self-sufficiency are not attainable in the near future. Before the volumes are large enough to fulfil international demand, years will have gone by.
Russia not self-sufficient for a while yet
The Russian Tekhnologii Rosta described a number of scenarios as a result of the boycott. Domestic growers will not just let their volumes go up, but also get better prices for the products. For a part of the produce, a price increase seems unavoidable; according to expectations, prices will go up by 5-20% by the end of year. In addition, the quality of imported produce will be lower. And a lot of investment is needed to keep domestic food supply at an adequate level.
More interesting is that Tekhnologii Rosta also paints a picture of the possibilities and the time it will take for Russia to become self-sufficient. That wish is frequently echoed in interviews and speeches by Medvedev and Putin. Vegetable volumes won't increase until early 2015. For stone fruit, volumes are expected to significantly increase in the 2018-2020 period, for apples and pears that's 2020-2023.
Local not local in Cyprus
To protest against traders labelling imported fruit and vegetables as local, Cypriot growers handed out fruit to members of parliament. The Agriculture minister said he wanted to take firm action against this practice. The government emphasizes that growers aren't against the imported produce in itself, but that wrong labelling misleads the consumer. Cypriot products suffer from the practice, because the products remain on shelves longer, suffering reputational damage. Citrus growers on the island are hit particularly hard by the boycott.
Boycott has large effect on European economy
The economic problems in the EU are worsened by the Russian ban on food. The loss of 5.1 billion Euro in export is putting prices under pressure. Food prices in the EU were already under pressure, making the problem worse. In August, inflation in the EU was at 0.3%, well below the 2% the ECB aims for. According to economist James Nixon, the decreasing food prices have the biggest impact on the low inflation. The effects are expected to be the greatest in countries that don't export much. For instance, German apple growers, who don't export much, are facing competition from Polish apples.
Vietnamese traders not convinced
Recently, Russia announced to improve trade relations with Vietnam, but Vietnamese exporters aren't lining up yet. The distance between the countries is too big, taxes are high and the Vietnamese fear the Russians' strict phytosanitary requirements. Although the number of companies doing business with Russia is increasing, and the Russians are willing to relax the regulations, there are past examples of loads not being allowed into the country.
For greenhouse vegetables, Russia is able to become self-sufficient in the period 2015-2030, although significant investments will be necessary. For greenhouse cultivation, the country will still be dependent on seeds and techniques from the Netherlands, France or Germany.
From November, December onwards, the first big effects on prices are expected. but the peak will be between February and May. According to Tekhnologii Rosta, there's a big chance that the Russians will lift the ban in January or February.
Local not local in Cyprus
To protest against traders labelling imported fruit and vegetables as local, Cypriot growers handed out fruit to members of parliament. The Agriculture minister said he wanted to take firm action against this practice. The government emphasizes that growers aren't against the imported produce in itself, but that wrong labelling misleads the consumer. Cypriot products suffer from the practice, because the products remain on shelves longer, suffering reputational damage. Citrus growers on the island are hit particularly hard by the boycott.
Boycott has large effect on European economy
The economic problems in the EU are worsened by the Russian ban on food. The loss of 5.1 billion Euro in export is putting prices under pressure. Food prices in the EU were already under pressure, making the problem worse. In August, inflation in the EU was at 0.3%, well below the 2% the ECB aims for. According to economist James Nixon, the decreasing food prices have the biggest impact on the low inflation. The effects are expected to be the greatest in countries that don't export much. For instance, German apple growers, who don't export much, are facing competition from Polish apples.
Vietnamese traders not convinced
Recently, Russia announced to improve trade relations with Vietnam, but Vietnamese exporters aren't lining up yet. The distance between the countries is too big, taxes are high and the Vietnamese fear the Russians' strict phytosanitary requirements. Although the number of companies doing business with Russia is increasing, and the Russians are willing to relax the regulations, there are past examples of loads not being allowed into the country.