There is uncertainty about re-exports to Russia. Reports from South Africa say that re-export from Europe is not possible, but a trader says it is business as usual. Russia achieved according to official figures a record harvest of nearly 1.65 MT of apples. In general, Russian growers are happy about the boycott, as they get the opportunity their market share due to reduced competition. In Europe, Portuguese pear growers have been hit hard. Although a relatively small proportion was exported, the effects are mostly indirect. Even Israeli exporters feel the indirect effects of the boycott. Europe is no longer an export destination for some products due to oversupply and not every exporter trusts Russian traders. In Kaliningrad, supermarkets have a very different problem. As a result of the ban on imports from Europe, a lot of fruit has to arrive via detours. As a result, some of the products arrive rotten at the supermarkets. In Ukraine, fruit prices have dropped so much that growers are in trouble.
Lack of clarity re-export Russia
There appears to be some ambiguity about the possibilities of re-export to Russia. South African organisations say they are unable to export stonefruit via Europe and for direct exports to Russia the products have to travel for longer. According to the South African, products are labelled as European, which makes re-exports impossible.
The South African company Seven Seas Fruit, with a subsidiary in the Netherlands, says that they only export directly to Russia. As far as they know, re-export is prohibited. Due to the weakness of the rouble against the dollar, the company expects higher prices and because the citrus market is under pressure, volumes will not increase much.
A Dutch trader says, however, that re-exports to Russia are indeed possible, but that the paperwork should be in order. He says that this week oranges and grapefruit, among other products, were shipped to Russia. "With the proper documentation it is not a problem." However, he warns traders about Russian non-payers. Retailers and large caterers tend to meet their financial commitments, but wholesalers often fail to pay.
Record harvest Russia
According to official figures, Russia has had a bumper apple harvest in the 2013/14 season, with a total of nearly 1.65 million MT, which is 12% higher than the previous campaign. According to experts, the growth in production was caused by higher yields. The average yield reached a record level of 67.4 MT/ha. The acreage decreased by 2% compared to last year.
Lebanon creates export office
Due to the increased interest of Lebanese exporters in the Russian market, Lebanon wants to set up an export office. The office will be devoted to promoting exports. In early October, a Lebanese delegation will visit Russia to further discuss export opportunities for fruits and vegetables, among other products.
Spanish organisations criticise EU compensation
Andrés Góngora, head of fruit and vegetables of COAG, criticised the compensation scheme. According to the organisation, growers would benefit more from a mechanism to control the market. He also points out that even aubergines and courgettes were exported in large volumes to Russia. ASAJA and UPA are more optimistic, especially now that the EC has expanded the list of products; however, both organisations would like for the compensations to apply also retroactively, as the scheme was delayed by the European Commission.
The growers organisation AVA-ASAJA has called for the EC to close its borders to products from countries currently taking advantage of the Russian boycott.
Spanish apples 52% cheaper
The boycott has put pressure on prices in Spain; apple prices dropped by 52%, from 25 to 12 cents per kilo. In Navarra, 215 tonnes of apples have been withdrawn from the market. The harvest is in full swing, and the total harvest is estimated at 15,800 tonnes. 22 tonnes of pears have also been withdrawn from the market, which is just 0.1% of the total harvest, which has reached 19,000 tonnes. Pear growers are better off because they will be able to claim hail insurance money after the hailstorms that took place earlier in the season.
The price drops are the result of the Russian boycott. Spanish authorities wish to promote the consumption of fruit by processing it into juices and distributing it in schools, among other measures.
Although the European pear harvest is 2% smaller than last year, pear prices in Catalonia are 10-20% lower than usual. The region's pear crops were not affected by the hailstorms in August. Approximately 3.33% of the 210,000 tonnes of pears grown in Catalonia were intended for the Russian market, as a result, Catalan growers are now looking for other destinations, such as Brazil, Hong Kong and Shanghai.
Cheaper Ukrainian fruit and vegetables
Last week, fruit and vegetable prices in Ukraine dropped by 3.1% after having dropped by 3.7% a week earlier. Over the past three weeks, prices have dropped by 12.5%. In the same period a year earlier, prices increased by 20.9%. Vegetable prices dropped by 10.9%, potatoes by 5.7% and seasonal and greenhouse vegetables are 3.9% cheaper. Fruit prices rose by 3.7%, mainly due to the more expensive imported fruit.
Growers in Ukraine are in trouble because of the low prices. The machines used in the cultivation process are imported and production costs are thus linked to foreign currencies. Because the exchange rate is not favourable and prices are low, the buffer for growers is very small.
Rotten fruit for supermarkets in Kaliningrad
In Kaliningrad, Belarusian peaches have appeared on the market, which cost 50% more than the Spanish import peaches. Polish and Lithuanian products have also surfaced. The region had to look for alternative supply channels due to the embargo. Despite these being found, shipment times are longer, which frequently results in the products reaching supermarkets already rotten.
Israel indirectly affected by boycott
Oversupply in Europe is leaving Israeli exporters with fewer options. In July and August, exports dropped by 23% compared to the same period a year earlier. Fruit exports are 36% lower, reaching a value of $ 39 million; vegetable exports have dropped by 17%, down to $ 16.5 million. Although Israeli exporters see the potential of the Russian market, they also point out the bad reputation that the Russian traders have regarding reliability and payments.
Russian growers happy about boycott
In general, Russian growers are happy about the boycott because it will allow them to increase their share in the domestic market. For example, 50% of apples were imported from Poland and another 13.7% from Moldova. Now these suppliers have disappeared and Russian growers can benefit from it. Prices have increased by 10.4% this year and are expected to be 30-40% higher in October. Additionally, the Government plans to invest 46 billion Euro in the development of the agricultural sector, including the seed industry, greenhouses, logistics, storage and processing facilities.
Portuguese pear growers in trouble
Pear growers in Portugal are selling the products at low prices. This means they can no longer meet their financial obligations. There don't have enough capital to purchase fuel or fertilisers, or pay the interests on loans. A grower explains he is selling pears for 50 cents per kilo, while last year he could sell pears of the same quality for double that price. Portuguese producers say they have received no compensations so far. Besides the direct effects of the boycott (10% of the pears were shipped to Russia), growers are facing increased competition from growers in other European countries.