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Russia deals with illegal re-export

Russia wants to stop gas supplies EU

Russia has established a team to track down re-export of banned produce via Belarus and Kazakhstan. Iran, Azerbaijan and Morocco have taken more concrete steps to increase export. Iran has published a list of products, Morocco signed an agreement and Azerbaijan received Russian praise for the quality of its products. Moldova is inching towards Russia. The country was boycotted because of a trade agreement with the EU, but when it comes to compensations, the country is on its own. That's why it's looking for new markets in Belarus, and Moldova is negotiating with the Russians to lift the ban. In a letter to the Dutch House of Representatives, minister Dijksma responded to parliamentary questions about the consequences of the boycott. Dijksma provided some insight into the price changes observed by the ministry since August 1, where big shifts were noticeable. The minister also responded to questions on the new EU compensation plan. 

Russia appears to use supplies of natural gas against the EU after all, following the conflict in Ukraine. Ukraine has been shut off from Russian gas for some time now, but gas supplies to some EU countries have now been partially cut off as well. As a consequence, it's becoming more difficult for Europe to supply gas to Ukraine. Researcher Andriy Boytsun wrote an article about this on He writes that the Russians are in fact willing to use gas supplies as a weapon, even though the economy is largely dependent on gas income. The researcher warns that it's most profitable for the Russians to cut off gas supplies during the winter months, when gas use in Europe reaches its peak. In the months that gas was still supplied to Ukraine, an enormous debt accumulated to the Russians.

Dutch growers stop supplying food bank
With the confusion about the European Commission's new compensation plan, the supply of fruit and vegetables to Dutch food banks has run out. In the initial period after the boycott, food banks received apples, pears, bell peppers and tomatoes. Now that the compensation plan has been postponed due to fraud, growers are no longer giving away the produce. One of the objectives of the earlier compensation plan was to promote supplying to food banks.

Dijksma answers parliamentary questions on boycott
Dutch Minister Dijksma answered a long list of parliamentary questions earlier this week, in connection with the Russian boycott. The minster announced she was keeping an eye on prices since August 1. Dijksma reports the following price changes: cucumber -40%, various tomato varieties +650-850%, red bell pepper +200%, green bell pepper -35%, and yellow bell pepper virtually stable. For Elstar, the price is 11% higher, and for Conference pears 14% lower. To determine whether a product is eligible for compensation, the export volume and the effect of the boycott are taken into account as well.

The minister also writes that compensation for stone fruit growers, partially prompted by bad weather conditions, is not a blueprint for the future. Dijksma does say she'll argue for onion growers to be eligible for the compensation plan in Brussels.

On September 19, RVO.NL received 455 requests for the fruit and vegetable support measures, taken by Euro commissioner Ciolos. 302 applications were passed on to the European Commission, and these requests represent a claim of 2.4 million euros. These are requests from growers and producer organizations up until September 3. This is what State Secretary Dijksma for Economic Affairs writes in response to questions from the House of Representatives.

The CDA calls the European compensation plan "a mess" and wonders what the consequences are for growers who had already filed a claim. According to the minister, the claims will still stand, and they are to be dealt with under the new compensation plan. Dijksma is also urging the EC to be lenient when it comes to dealing with claims from growers who have destroyed produce or non-harvested, but who might be left behind under the new plan.

Citrus growers receive EU compensation
According to the Cypriot Minister of Agriculture, citrus growers are also on the new list with sectors that are eligible for compensation after the Russian boycott. Virtually all of the damages caused to Cyprus by the boycott, fall to the citrus growers on the island. Of the 13.5 million euros exported by the island to Russia, citrus yielded 10.7 million euros.

French farmers take action
Tensions are rising in France regarding the consequences of the boycott. Last Wednesday, Breton farmers barricaded the highway by driving tractors across the road. Angry farmers are also setting fire to potatoes, cauliflowers, tyres and bales of hay, and a dummy with the head of president Hollande was put under a guillotine.

Russia wants to tackle illegal re-export
Russian customs have put together a plan to intercept re-export of banned products through Belarus and Kazakhstan. Mobile brigades are to hunt down illegal trafficking. The past months, customs intercepted several shipments of fruit and vegetables that turned out to originate from a boycotted country.

Russian retail complains about quality
The supermarkets are not pleased with the quality of the products that are to replace banned products. Not only is fewer fruit and vegetables available, the quality is also worse. Supermarkets are seeing a big difference in quality between European produce and Asian fruit and vegetables. Retailers are also struggling to replace fruit and vegetables previously imported from Southern Europe, especially when in other parts of the world the season for these products has no overlap with the Southern European season.

New distribution centre X5
The X5 Retail Group recently opened a new distribution centre in the Rostov region. The centre has a capacity for 260 trucks a day, and comprises three units: dried and cooled storage, and temperature-controlled units.
The new centre is to contribute to the centralisation of supplies from the manufacturer to stores, and hence smoother logistics of higher quality. 
According to the minister for Economic Development of the Rostov region, Alexander Levchenko, the new centre will not just give sales by local producers a boost, but will also cause the number of imported food in the Southern Federal District to significantly go down.
More logistics centres are appearing in the region. At the moment, Lenta is building there. The EU embargo appears to be the motivation in this case as well.

Growing export to Russia
Russian customs have released figures showing a significant increase of import from non-boycotted countries. Turkish peach export is reportedly 72 times higher than before. Other countries that saw peach export to Russia increase, are Macedonia (+180%) and Serbia (380%). Russia also imported 4.5 times more apples from Serbia and Ukraine. The increase is partially thanks to higher yields of peaches and apples in these countries.

Iran publishes list with export products
In response to the Russian demand for products from Iran, the Iranian ministry has published a list with products. The list shows the acreages and export possibilities. According to the list, products with the biggest export potential are citrus, apples, grapes, herbs, vegetables and flowers.
There were more products on the Russians' shopping list, including pineapple, banana, melon and tomato, but some of these products are not grown on a large scale in Iran. Iran has indicated they see opportunities for re-export of these products though. The list of Iranian products available for Russia, includes the following products: citrus, kiwi, apples, dates, figs, grapes, peaches, cherries, apricots, pomegranates, nuts, almonds, mushrooms and herbs. 

Moldova negotiating with Russia
Moldovan deputy prime minister and Minister of Economic Affairs Adrian Candu visited Moscow to discuss lifting the ban. Moldova wants Russia to lift the sanctions; the country's apple growers are hit particularly hard by the sanctions. Moldova is on its own. When it comes to compensations, the country has to loan money, for instance from the IMF. The country was boycotted because of a trade agreement with the EU. Apart from a discussion on lifting the sanctions, negotiations on Russian gas supplies to Moldova were also on the agenda.
Incidentally, Moldova is also looking for new markets. The country saw a big increase in export to Belarus in the past few months. The two countries made a 38 million euro deal. Since July, apple export to Belarus has increased 24-fold, and plum export 6-fold.

Morocco strengthens relations Russia

The Russian and Moroccan Agriculture ministers are pleased. The two countries made a deal concerning trade in agricultural produce and fish. About 97% of Moroccan export to Russia consists of agricultural produce and fish. Russia purchases 6.3% of Morocco's fresh produce export, making it second in the ranking. The largest buyer is the EU, with 62.7%. The most important export product is citrus, followed by fish and tomatoes. By the way, Russia is also offering places at Russian universities to Moroccan students.

Azerbaijan produces more fruit and veg
The Azerbaijani statistical bureau published figures on the country's fruit and vegetable cultivation. In general, an upward trend is noticeable. According to the figures, in 2007 6.77 million tonnes of fruit were grown, while in 2013 that was 8.5 million tonnes. The volume increased annually. Fruit and vegetable export has reportedly increased by 20.5% this year, and export to Russia doubled. Azerbaijan sees a lot of potential in the Russian market, with the EU boycott. The Russians are also pointing to the high quality of produce the country is able to supply. 

Tomatoes in banana boxes intercepted
On the highway between Belarus and Moscow, two more shipments of potatoes and a shipment of tomatoes were intercepted. The loads, together over 50 MT, were on their way to Moscow. Russian authorities discovered the products were labelled incorrectly. The tomatoes were transported without a label, and packaged in banana boxes. The trucks were sent back to Belarus.

Good harvest in Russian region Novgorod
The potato harvest in the Novgorod region amounts to 282,000 MT, 35,000 MT more than last year. The total vegetable harvest in the region amounts to 68,500 MT according to official figures. In 2013, that was still 62,500 MT.
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