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2015: A look back on the Russian boycott

Extending, destroying and anticipating

This past year has been full of news about Russia and the boycott. In this last edition of the year we take a look back, we separate the important from the unimportant, and we see that what is left over is continued political tension and possibly acquiescence, with an additional Russian blow to Turkey.

Russia sent back tons of fruits and vegetables this year because of problems with export documents. Lack of clarity about the country of origin is enough for the products to be held after investigation. Products from non-boycotted countries were intercepted regularly on the basis of phytosanitary breaches. 

Hoping for dialogue 
At the beginning of the year there was some hope that Europe would not extend the sanctions. On the Russian side there was talk of open dialogue and on the European side, the mood was positive. Yet the sanctions were extended in March by six months, in the run up to the summer they were extended again for six months, and this month a third extension has been announced. Despite the fact that various European countries have called for open dialogue (France, Germany and Italy made this appeal), the sanctions remain in effect.

A crucial factor is the implementation of the Minsk Protocol. This treaty attempts to restore peace to Eastern Ukraine. In addition to the warring parties withdrawing troops, international military must also leave the conflict area. Europe is convinced that Russian is militarily active in Eastern Ukraine, something that the Kremlin has not denied. 

Extending the sanctions
Just as was expected after the sanctions were extended by Europe, Russia extended the boycott last summer. Russia does not do anything halfway, the borders will be closed for European products for another year. A decision has to be made again in the summer of 2016.

Russia insists that the country will be self-sufficient, and according to their statistics and the large number of investments, the country is on track. General economic figures show a different picture: rising inflation, the ruble's persistent weakness, low oil prices, rising prices in the supermarkets and a growing number of Russians living below the poverty line. They have definitely not reached their target yet. The holes in the Russian market from the boycott have been difficult to fill with products from non-boycotted countries. It has not been possible to find new suppliers for all the products they need.

The countries that are supposedly jumping at the chance to export to Russia consist mainly of former Soviet republics like Georgia, Azerbaijan and Armenia. In addition, Egypt has always shown interest in the Russian market. Other countries like Morocco and Israel are more cautious. Although these countries see the potential, there are concerns about the financial settlements of trade. 

EU countries flirting with Russia
On the European side, trade has been based on the loss of the Russian market. New markets have been found. According to figures from the FAO, the boycott resulted in a shift in the world's trade flows. 
In the first half of this year some European countries flirted with Russia. It is openly known that Athens no longer supports the sanctions. The country even asked to be excluded from the boycott so they could resume export. Hungary, Cyprus, Italy and Spain tried to get on Russia's good side. At first Moscow teased the countries, but in the end they held onto their word: the borders remain closed.

Destroying and tightening
A new law was adopted in the spring that gave the Russian inspection license to destroy seized products. The inspection took the law in hand and destroyed tons of illegally imported products, to the fury of some Russians. Several proposals were made to use the food for other purposes, but to no avail. In recent months the reports of destroyed food have slowed down. 

To stop the smuggling of illegal products, Russia announced stricter controls on the border with Belarus this past fall. In a short period of time Belarus has grown to become Russia's main supplier of fruits and vegetables, in which products from boycotted countries also enter Russia. This did not escape the Russians, who decided to tighten controls on paperwork; every shipment must now have an original phytosanitary certificate. This has appeared to cause serious problems in the form of trucks not being able to cross the Russian border because they lacked the appropriate documents. 

Turkey also boycotted
Finally, there was an incident on November 24th when Turkey shot down a Russian war plane. The Kremlin reacted strongly with economic measures. In addition to sanctions on various sectors, the border was closed for a list of Turkish fresh produce items. The Kremlin went to work: a product like lemons, which would be difficult to fill with other importers, was spared. Moscow postponed the introduction of the boycott until the new year. But in reality many shipments have been sent back to Turkey since the incident because of phytosanitary breaches. There were also reports that Turkish trucks were not allowed to cross the border. 

In Turkey, the sector began to panic immediately. Citrus growers asked the government for help and traders reported falling prices. It seems as though Egypt will replace Turkey; Egypt is very interested in the Russian market. Iran has also been mentioned many times. There is also Morocco and Israel, but traders in these countries are more cautious. After the European boycott, Russia seemed like an attractive market, until the ruble fell and the traders were left with the pieces. 

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