Update Dossier Russia: In Europe more competition through decreasing prices

Russia: More import from Central Asia means more drugs

News appear every day in the international press about the Russian boycott and the implications for certain countries or producers. Europe has to search for new export markets and the surpluses, for example in Poland, threaten to be detrimental for growers across Europe. In Russia, it appears that the increase in imports from Central Asia has also led to an increase in drug trafficking. Additionally, the Kaliningrad region, enclosed by European countries, has fallen victim of closed borders. Trucks with vegetables and fruit are forced to wait in long queues on the Lithuanian side of the border.

Polish apples compete in Europe
While Polish agriculture as a whole has been hit hard by the Russian ban, there are product groups that seem to escape unscathed. The damage to broccoli and cauliflower growers is expected to be low, according to figures from the Foundation of Assistance Programmes for Agriculture.

The Eastern European country exported 25.5 thousand tonnes of broccoli and cauliflower in 2013 for a value of nearly 9 million Euro. Russia's share was four thousand tonnes, accounting for 1.43 million Euro. Each year, the importance of the Commonwealth of Independent States, an alliance of former Soviet republics, as a destination for Polish exports is reduced. A significant part of the broccoli and cauliflower exports go to Western Europe. The growing consumption of these vegetables in Western Europe can help alleviate the situation for the sector. Additionally, nutritionists want to promote the consumption of broccoli and cauliflower in Poland.

Polish apple growers have a lot more to suffer from the import ban. The country’s juice industry launched a campaign to promote the consumption of fruit juice, and particularly apple juice. Every year, 260,000 tonnes of Polish apples are processed into juice; the average Pole drinks 11.7 litres per year, of which 3 litres correspond to apple juice. The juice industry said that a doubling in juice consumption volumes would help reduce the pressure on the apple sector.

Polish apples can also cause problems for growers in other European countries. Not only because Polish fruit is reoriented towards the European market, but also because Poland is looking for new markets, which are the same ones Western Europe is looking to enter. The cheaper Polish apples would be tough competitors for the more expensive Western European fruit.

Latvia afraid of Polish surplus
Poland’s surplus production will be sold in neighbouring countries. Latvian growers are concerned about the increasing imports of Polish vegetables and fruits, which put pressure on prices. "The situation is very threatening; we already had to throw away cauliflowers, courgettes and other seasonal products," says a Latvian grower. Producers have asked the government and banks for support.

Spanish growers dumping potatoes
Spanish growers dumped potatoes on the pavement next to supermarket chain Carrefour as a response to the retailer lowering its prices. Growers are angry because the sanctions had already put pressure on prices.

Cyprus focusing on Arab countries
The island places its hopes on new markets, such as Egypt and the United Arab Emirates. The loss of 13 million Euro affects mainly the citrus and nut growers, which are the country’s biggest export products. The citrus season will start in November and thus the damage can be reduced by finding new markets.

Belgium waits
Belgian growers are asking the government for funds to be able to enter new export markets. Growers want to ship their products to destinations like the United States and Canada, among others. Despite long-running negotiations with these two countries, the borders are still closed. Additionally, producers want clearer information about the EU’s compensation scheme. On that basis, growers will decide whether to harvest or not.

Central Asia shipping fruit and vegetables and drugs
According to reports, the import ban has had a positive effect on Central Asia’s fruit and vegetable sector, as Russia has switched to some of these countries to fill the shortage gaps. According to Russian sources, the quality of these products is good; some even believe that the quality is better. But imports from these countries also have a negative side; more and more drugs are found together with the fruit and vegetables. Earlier this week in Moscow, 180 kilograms of heroin were discovered hidden in an apricot shipment.

Kyrgyzstan sees an opportunity
Kyrgyzstan sees an opportunity. The country is trying to enter Russia and Kazakhstan via the Eurasian Economic Union, a counterpart of the EU. Russia and Kazakhstan have sanctions in place on products from Kyrgyzstan, but the latter would like to set up a direct export line to the former. In order to achieve this, the country must meet Russia’s import requirements.

Drought put Azerbaijan offside
Meanwhile, Azerbaijan appears to have fallen off as a supplier of fruits and vegetables. The country is facing a severe drought which heavily affected the autumn and winter harvest. The drought is so severe, that for some growers it will possibly take at least five years for normal harvest volumes to be restored. Rains in the autumn could alleviate the situation, but they could also cause mud flows.

Russia remains optimistic about its own crops
In Russia, the leaders remain optimistic. Governors of different regions believe that the agricultural sector can grow. The governor of Kuban, for instance, expects its agricultural production to double with the opening of a new greenhouse complex in Saratov next November, which will increase production volumes by 870 tonnes. This year, the region harvested 4,500 tonnes of vegetables.

Consecrated apples distributed among disabled children in Moscow
During an Orthodox holiday (19 August), 250,000 apples were distributed in shelters among disabled children in Moscow. The apples were from local growers. The Moscow region announced in the media that the volume of vegetables and potatoes harvested increased by 29%, which amounts to a total harvest of 22,342 tonnes. Beets, potatoes, carrots and onions are the main products with 9,841 tonnes, 1,918 tonnes, 9,672 tonnes and 592 tonnes, respectively.

Kaliningrad (Russia) enclosed by Europe
At the border between Lithuania and Kaliningrad, Russia, there are reportedly lines of trucks with fruits and vegetables waiting to be allowed across. The drivers must be able to demonstrate where the products come from. The Russian region of Kaliningrad is most vulnerable to the Russian sanctions, because the region is enclosed by European countries. In the first half of the year, Poland supplied the vast majority of the fruit and vegetables.

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