Although the oil price continues to go down, the rouble is still decreasing in value compared to the dollar and inflation is on the rise, Putin also remains popular. Putin's popularity even went up in the past six months. Also dwindling rapidly in recent months, are the country's foreign exchange reserves. Although Russia has a hefty bank account - with about 420 billion dollars in savings - the Central Bank has already pumped 70 billion dollars into the economy to support the rouble. With those reserves, Russia can keep going in the short term, but in the long run, the situation is untenable. Russia's national debt is at 13% of GDP. More worrying is the debt in the private sector. Of Russia's foreign debt, 731 billion dollars in June 2014, 74% is owed in foreign currency. Due to the rouble's declining value, it's becoming more difficult to pay back these debts.
Police chases truck with Polish apples
Last week, Russian police chased a truck for over 200 km. The truck was carrying Polish apples, and had drove off at the border. At the border between Belarus and Russia, the truck was stopped with a cargo of 18.8 tonnes of Polish apples. According to the driver, the shipment was destined for Kazakhstan, but Russia has halted transport of European apples. When the driver found out he would be sent back, he left behind his documents and drove on into Russia. After a 230 km pursuit, the man was apprehended. Why the driver was able to go on for such a distance, is unknown. According to the phytosanitary service, the man's actions prove that he wanted to sell the apples in Russia. The driver was handed over to Belarusian authorities.
Switzerland still suspected of illegal export
The Russian phytosanitary service is in talks with Switzerland, awaiting the documents that are to explain the increased export figures, but the Russians are still not convinced of Switzerland's innocence. Switzerland already handed in certificates that prove the apples are indeed Swiss, but the Russians remain suspicious. The Alpine country's export quadrupled following the boycott, which set off alarm bells with the Russian inspection. It suspects Switzerland of illegal export of European apples. The Swiss haven't been able to completely take away that suspicion yet.
Medvedev: "Russia self-sufficient in the medium term"
In an interview, Russian prime minister Medvedev said that Russia can be self-sufficient in the medium term. The prime minister also responded to the consequences of the boycott. "Nobody said we would have a wide range of Russian products a day after the boycott," the prime minister said. He added that in the months leading up to the boycott, most of the products in supermarkets were imported, but that he is confident that Russia can do without import. Finally, Medvedev pointed out that the shelves are now stocked with Russian products.
The prime minister also foresees disruption on the Ukrainian market, now that the country seeks rapprochement with the EU, and import restrictions are being phased out. According to Medvedev, Ukraine will be flooded with products from European competitors, which will harm the Ukrainian economy.
Russians eat more frozen products
At the end of this year, the volume of frozen fruit in Russia will be 25% higher than last year, BusinesStat calculated. According to the report, the volume of frozen products had already increased by 36% between 2009 and 2013, to 315,000 tonnes in 2013. For the period 2014-2018, an annual increase of 5% is expected. The majority of these products, about 60%, is sold through retail. The industry purchases 14.4% of the volume, and the other 25% is bought by the food service sector. The Russian market strongly depended on import in 2013. Between 64 and 74% of products were imported.
British growers threatened with bankruptcy
British apple growers are being hit hard by the boycott. Apples from other European countries are flooding the market, supplanting the British apples. Prices have decreased by more than half compared to last year. For a number of growers, bankruptcy is looming. Stories are circulating among British growers about trucks full of apples being sent out from Poland, to sell the apples at any price elsewhere.
British apple growers are being hit hard by the boycott. Apples from other European countries are flooding the market, supplanting the British apples. Prices have decreased by more than half compared to last year. For a number of growers, bankruptcy is looming. Stories are circulating among British growers about trucks full of apples being sent out from Poland, to sell the apples at any price elsewhere.
EU extends compensation
The European Commission proposes additional measures to take away the market disruption in the fresh produce market following the boycott. On Friday, the Commission said that the measures will run until the end of June 2015. The proposal provides a solution for certain products in specific member states, that can be taken off the market. The volumes will be based on the average export volumes over the past three years. This way, the Commission wants to create a safety net for growers, who haven't found any alternatives yet.