The first statistics for August and September show that Turkey and Serbia have profited from the boycott. These countries exported significantly more since the ban was introduced. German companies received an order to build a new storage facility for vegetables at St. Petersburg and Russian mushroom growers see opportunities. However, Russian consumers are concerned about the chemicals China used to treat its products. Poland focuses its sights on India. The country wants to export apples to this huge market in Asia to offset the losses. Dutch growers who applied for compensations between 4 and 10 September may face problems. They will receive no compensations from the old regulation, but it is still unclear whether their applications fall under the new rules. Ukrainian traders are taking big risks by exporting to Russia, as the Russians pay in roubles 14 days after delivery. Due to the devaluation of the currency, exporters receive relatively less.
The effects of the economic war between Russia and the West will have greater implications for the European economy. According to the Federation of International Employers (FedEE Global), the labour market will shrink next year. For Russia, a contraction of 1.2% is expected, while for Germany and Japan it will be of 0.5% and 0.3% respectively. Within the EU, Spain is growing only by 1.4%. Other countries growing include Mexico (+2.8), Chile (+2.2), Australia (+1.8), New Zealand (+1.6) and the U.S. (+1.6). The FedEE believes strong Euro countries as France, Germany and Finland will suffer too. According to the organisation, this can be the beginning of a downward trend for Europe as a world power.
Statistics for new partners
Since the introduction of the boycott, a long list of countries announced their wish to rapidly increase their exports to Russia. Although Russia's fruit and vegetable imports were lower in summer, the preliminary statistics of recent months reflect that the biggest winners are Turkey and Serbia, with China, Argentina, Macedonia, Uruguay and Armenia also benefiting from the boycott. Their export volumes to the Russian market have clearly increased. Incidentally, not all data has been fully collected. For example, the export figures from Belarus, Azerbaijan, Moldova and Uzbekistan are not yet complete.
In recent years, Russian imports in the summer months focus mostly on peaches (70-90,000 tonnes) and pears (25-35,000 tonnes) apples (18-30,000 tonnes) and tomatoes (15-25,000 tonnes). In the last quarter of recent years, the countries that are now boycotted exported about 500,000 tonnes of fruits and vegetables, with apples, pears and tomatoes being the major products.
Dutch growers in a difficult position
The European Commission has not been clear regarding the compensations for growers who reported their losses between 4 and 10 September. These claims fall outside the old compensation, but it is unclear whether they will fall under the new measures. Secretary Dijksma urged the EC to quickly find a solution.
Germans build warehouse in Russia
The Governor of St. Petersburg reports that German companies are to build warehouses for vegetables near the city with the use of German technology. According to the governor, there is an abundance of fruits and vegetables during the harvest season, but a lack of storage facilities. By the end of 2015, the construction of a logistics centre will start, which will have an area of 30 hectares and cost 2.5 billion roubles (50 million Euro).
Turkish juice industry hit by boycott
The boycott has granted Turkey an opportunity to increase exports to Russia, although growing exports may have negative consequences for the Turkish market. Due to bad weather conditions, the harvested volumes this year are lower than normal. More exports can entail higher prices in the Turkish market, causing problems for the processing sector.
Concentrates are not covered by the boycott; thus, it is expected that Europe will use its surpluses for their production, which will be exported to Russia. This may reduce the market share of the Turkish juice industry in Russia.
Toxic fruit and vegetables from China?
Russian consumer organisations are worried about the impact of government plans to import more fruits and vegetables from China. Public health could be in danger, according to these organisations. Chinese growers use pesticides that are banned in Europe and Russia. Additionally, the fruit and vegetables may be treated with chemical agents to give them a more attractive appearance. According to consumers, these products are bad for your health.
Ukraine puts pressure on Crimea
With its new customs regulations, Ukraine has made trade with Crimea more difficult. Crimean products to be imported must first receive clearance, something Crimea is unprepared for. Due to these regulations, Ukrainian exports have sharply dropped, with the result that prices have increased significantly in Crimea. Vegetables, potatoes, sugar and meat have become considerably more expensive, and according to statistics fruit in Crimea has become 50% more expensive.
Deflation rouble a risk for Ukraine
Despite the tension between the two countries, Ukraine still exports fruits and vegetables to Russia. There is demand for products such as cucumbers, tomatoes, potatoes, onions, carrots, cabbage and apples. But the trading conditions entail great risks for Ukrainian exporters. Russians pay with the Russian rouble and payment terms of 10-14 days. The rapid depreciation of the rouble is therefore an additional risk for exporters.
Russian trade delegation visited Uzbekistan
In the Uzbek city of Tashkent, a meeting took place between a Russian trade delegation and the Uzbek authorities. The programme included negotiations on trade and cooperation between both countries. In addition to discussing the wish of Uzbek exporters to gain access to Russia there were also talks about the possibility of Russia's Novosibirsk region to export seed potatoes to Uzbekistan.
Mushroom growers see opportunities
Russian mushroom growers stress that they will ensure that the boycott on Polish mushrooms will not cause any shortages in the Russian market. Russia imported large volumes of this product, and thus domestic growers see the boycott as an opportunity. The city of Millerovo, close to the border with Ukraine, is one of Russia's largest shiitake mushroom growers. The complex produces 500 MT mushrooms, but the production will increase to be able to supply various Russian regions.
Poland expects more revenue from exports
According to experts from BGZ Bank, Polish exports and growth in foreign markets will be the country's most promising sales channel. Revenue from exports is expected to increase. This is the result of saturation of the domestic market and a growing demand for food in other parts of the world. Between 1995 and 2013, the average export value in dollars increased by 14.1%. Export growth this year will be slower mainly because of the boycott and falling prices.
Polish apples to India?
The apple sector in Poland has been heavily affected by the boycott. The loss of the Russian market resulted in huge losses. Therefore, Poland is looking for new markets. According to Polish exporters of San-Export Group, negotiations are underway with India. The cooperative exported 50-70,000 tonnes of apples to Russia last year. Being competitive in terms of pricing in the Indian market, however, is difficult for Polish apple exporters. Only by exporting large volumes can trading be profitable due to high transport costs and expensive storage in a tropical climate. Western Europe is also seen as a possible new market, but the fruit is not welcomed with open arms. Strict controls are enforced to protect domestic crops from Polish apples.