Author Archives: CrispConsulting

Russia Considering Reduction of VAT on Fruit

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The Russian Ministry of Agriculture has proposed the introduction of tax incentives for Russian fruit producers. According to the head of the Ministry of Agriculture, Alexander Tkachev, the reduction of VAT by eight percentage points would reduce the flow of imported fruit into Russia. According to the Ministry, agricultural product prices have every chance of falling by more than 15% by the end of September, and “in five years we could be able to stop the import of basic fruits, like apples, pears and grapes.”

Currently Russia buys several varieties of seasonal grapes from the former USSR republic of Uzbekistan, as well as in Latin America (Chile and Argentina). The purchase of apples is made in Serbia, Moldova and Belarus. Pears on Russian shelves come mostly from Lebanon, Morocco and Turkey. In the first six months of 2017, the country was supplied with about 500,000 MT of apples, which is 30% less than in the same period last year.

Russians are now consuming fewer imported fruits and vegetables, according to the Ministry of Agriculture. In fact, after the ban on the import of agricultural products from the European Union, the share of foreign fruits delivered to Russia declined by more than 50%, while the acreage in the country has increased by more than 40% over the last two harvesting seasons.

According to statistics from the Ministry of Agriculture, in 2016, a total of 14,600 hectares of new plantations were set up. In the same year, the Russian authorities allocated about 2.2 billion roubles for investment projects aimed at expanding the acreage. The cost of setting up one hectare can vary from 400 thousand to 3.5 million roubles, depending on the terrain and varieties planted. In 2017, the area of ​​new plantations will reach 15,600 hectares.

The potential to reduce prices for fruit and vegetable products in Russia in the coming months is about 15%, according to the authors of the report “Inflationary picture in July”. In the summer months, vegetables and fruits have already become 7.5% cheaper.

www.freshplaza.com

European Union Extends Sanctions Against Russia over Ukraine

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The European Union has extended sanctions by a further six months against dozens of Russian citizens and companies deemed to have a role in threatening the stability and independence of Ukraine.

EU headquarters said Thursday the restrictive measures have been prolonged until March 14 and now apply to 149 individuals and 38 entities. It said the sanctions are in response to “actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.”

The EU first imposed the sanctions after Russia annexed Ukraine’s Crimean Peninsula in 2014 and supported pro-Russia separatists fighting Ukrainian forces in Ukraine’s east.

The bloc has repeatedly extended the sanctions as the conflict continues. A 2015 peace deal helped reduce the scale of fighting, but violence continues.

www.abcnews.go.com

Chinese Fruits and Vegetables Dominate Sales in Russia

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Three years ago Russia implemented punitive measures against European countries and the United States of America. Later they also carried out sanctions against Turkish products. Against this background, Chinese fruits and vegetables have started occupying sales counters in Russia. According to the customs office of the Russian Federation, Chinese fruits and vegetables had only held 9.6% of the market shares in Russia, but this has grown by almost 20% in the first half of this year. The Chinese potential is huge.

Due to the climate and the use of all kinds of technologies, the crops grown in China are more abundant than those of many other countries. The produced vegetables and fruits respectively take up 60% and 30% of the global output. Only for potatoes, the yearly Chinese output has reached up to somewhere between 60 million and 70 million tons, which is more than twice the output of Russia itself. Many sorts of Chinese products have started increasing their market shares on the Russian market, among these is the Chinese cabbage’s increased from 25% to 39%. Some products have nearly monopolized the Russian market. Garlic, for example, holds 80% of the market share. Currently, Russian importers have been paying more and more attention to Chinese products.

Cheap prices are one of the main reasons why Chinese goods are becoming increasingly popular. Chinese producers can provide cheaper products than competitors in other countries. As a matter of fact, the amount of Chinese products crossing Russian sales counters is a lot larger than was indicated by the customs office. In the most recent 10 years, Chinese people have started growing large amounts of vegetables within the Russian borders. The main Chinese plantations are located in Siberia or in the region around the Ural mountains. Chinese communities can be found throughout almost all agricultural regions in Russia. The output of these farms that are operated by Chinese growers is a multiple of the output of farms in China, but the price for products is a lot lower.

www.freshplaza.com

Reuters: Russian Economic Growth Upgraded, Inflation Seen Slowing

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Russia’s economy is seen growing slightly faster this year than previously and inflation is seen slowing, a Reuters monthly poll of economists showed on Thursday.

The median forecast of 20 analysts and economists polled by Reuters in late August was for Russian 2017 gross domestic product (GDP) growth of 1.7 percent, above last month’s call of 1.4 percent.

Even though Russia’s economic outlook has improved, the poll’s median forecast is still below the economy ministry’s forecast of 2.1 percent this year.

Russia’s economic prospects could improve further, however, if the central bank cuts lending rates as analysts expect.

Respondents said the conditions were now right for the central bank to trim the key rate, now at 9 percent, at its next board meeting on Sept. 15.

A resilient rouble and steady oil prices have given the central bank room for a rate cut, analysts at Bank St Petersburg said in comments with their forecasts.

The central bank is now widely expected to trim the key rate to 8.75 percent next month, taking it to 8.25 percent by the end of the year, the poll showed.

“There are the conditions for a further rate reduction, and a step of 25 basis points is optimal,” said VTB economist Alexander Isakov. “It insures the central bank against overshooting the trajectory which leads to 4 percent inflation.”

The Reuters poll showed 2017 consumer inflation at 4.1 percent, compared with last month’s forecast of 4.2 percent.

This marks a slowdown of nearly 17 percent from early 2015.

Now, when headline inflation has already hit a post-Soviet low of below 4 percent, the central bank may embark on monetary easing cycle after keeping rates on hold since in July, the economy ministry predicted.

Russian Economy Minister Maxim Oreshkin said earlier on Thursday he expected consumer inflation to reach 3.5-3.7 percent by the end of the year.

“We think this would be among the factors that open the door for monetary policy easing by the central bank,” he said.

The poll also showed that the rouble is seen trading at 61.60 versus the dollar in a year from now RUB, slightly weaker than the 61.00 forecast last month.

www.reuters.com

EU Fruit Still Slipping into Russia Despite Sanctions

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Despite ongoing sanctions imposed by Moscow on fruit and vegetables from European Union countries in response to EU measures banning the sale of produce from Russia, large quantities of fruit such as nectarines and peaches from the bloc’s warmer member-states, including Greece, Italy and Spain, are reaching Moscow shelves in a steady supply, with Belarus-based middlemen seen as the prime suspects in the illicit trade.

Belarusian traders are suspected of slipping through the sanctions net and passing off Mediterranean fruit exports as their own – likely with the assistance of Russian officials.

Initial reports of a doubling of Belarus exports of nectarines and peaches to Russia failed to raise eyebrows, even though the landlocked Eastern European country is not a major producer of either fruit.

It later became apparent that produce hailing from Italy and Spain was reaching the Russian market.

Recent reports have indicated that traders with links to the Russian market are sweeping through northern Greece, a key crop-growing region, and buying large quantities of fruit including nectarines and peaches.

A recent survey conducted by Kathimerini confirmed that Greek produce is widely available at retail outlets in the Russian capital.

Russia largely depends on imports for its fruit and vegetable supply.

Last year, the authenticity of trade documents certifying the origin of products exported by Belarus had been questioned by Russian officials.

Despite the EU-Russia sanctions, Greek traders are well aware of the fact that it is still possible to export to the Eurasian Economic Commission (EEC), a five-member common market with a combined GDP of more than 3 trillion dollars comprising Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan.

Getting cargo into any of Russia’s fellow EEC members enables unobstructed entry into the Russian market.

Meanwhile, Greek olive oil exports to Russia – the product category is not included in the sanctions – have almost doubled, rising by 91 percent to 3.1 million dollars’ worth of trade in the first half of 2016, compared to 1.6 million dollars during the same period a year earlier.

www.ekathimerini.com

Fruit and Veg Prices Expected to Fall by 80% in September

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The Russian Ministry of Economic Development has forecast that Russians will soon see a significant drop in food product prices. In September, compared with June, the cost of fruits and vegetables may fall by almost 80%.

In the first month of autumn, compared to the first summer month, the overall decline in food prices will be 1.3%. This forecast has been made by specialists of the Ministry of Economic Development of Russia, as reported last week by the newspaper Izvestia, which got a letter from the department regarding the socio-economic development of the Russian Federation in the coming years.

According to this information, the decline in prices for fruit and vegetables in September compared with June will reach 79.6%. In the autumn of 2018, prices for all food products will not differ much from the prices of the current autumn, the forecast says.

The agricultural producers interviewed by the publication agree with the conclusions of the experts of the Ministry of Economic Development and Trade.

“The Ministry of Agriculture reported that this year’s harvest is quite good, so the products will really fall in price. Every September, it is more profitable to purchase not only fruits and vegetables, but also mushrooms, as well as fresh red caviar, which hits the shelves at that time,” explained the industry representative to the newspaper.

www.freshplaza.com

Egyptian Fruit & Veg Exports to Russia Increase by 28%

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Minister of Industry and Trade Tarek Kabil said that the inter-trade between Egypt and Russia had witnessed a tangible improvement for the first time since 2014.

Egyptian exports to the country during the first half (H1) of 2017 amounted to about $360m compared to $286m, meaning that Egyptian exports to Russia jumped 26% after a decline ranging between 16 and 25% during the past two years.

Kabil attributed this significant improvement in the volume of exports to the intensive promotional efforts carried out by the ministry and its success in lifting the ban on agricultural exports and Egyptian potatoes, as well as solving all problems that Egyptian exporters faced.

A report was sent by the Russian trade office to Kabil, in which was outlined the indicators of the performance of foreign trade with Russia during the H1 2017. The report showed that Egyptian vegetables and fresh fruit exports witnessed a significant increase, reaching about $303.8m during H1 2017 compared to 236.2m during the same period in 2016—an increase of 28.6%.

Egyptian exports of agricultural crops also increased 28.8%. Fresh strawberries increased by 43.7%, fresh potatoes 159.5% and onions 29.8%.

www.freshplaza.com

Tomatoes in Game of Yes-No Between Russia and Turkey

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Last week’s meeting between Russia and Turkey has yet to provide clarity about the tomato boycott, but the yes-no game isn’t over yet. In the run-up to the meeting, contradictory reports were heard. After last week’s meeting, only one thing became clear: nothing is clear yet, so borders will remain closed for now.

The choice of words of both parties after the negotiations illustrate the confusion. The Turkish Minister of Economic Affairs Nihat Zeybecki said in Turkish media that various agreements had been reached. For the remaining small problems he expects a solution before 20 October (when there’s a meeting in Kazan). “There are just one or two very small things regarding agrarian products. We agree on all major lines. I am certain all problems will be completely solved before 20 October.” Specifically about the tomato boycott the minister said: “In the near future we hope for a positive solution from the conversations with the Russians about lifting the sanctions.”

“Proposals for liberalisation of the tomato trade will be prepared separately within parameters between the Ministries of Agriculture,” according to the Russian Minister of Energy Alexander Novak in Russian media. When asked if the sanctions could be lifted by 20 October, he answered: “Yes, definitely. We have confidence that all will become clear before the meeting of the intergovernmental commission.”

A Russian analyst illustrates the different points of departure of the two countries for Turkish website Vestnik Kavkaza. “Our growers are unable to deliver tomatoes that can compete with the Turkish ones. It is obvious that Ankara is very interested in an end to the boycott, but our growers aren’t interested at all.” Earlier the Russian Ministry of Agriculture said he wants to protect the investments that have been made in the Russian cultivation of tomatoes.

www.freshplaza.com

AgroFoodDrinkTech Expo Georgia 2017

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AgroFoodDrinkTech Expo

November 20 – 22, 2017

118 Tsereteli Ave. 0119, Tbilisi, Georgia

AgroFoodDrinkTech Expo, 17th international exhibition for agricultural, food and drink products, packaging and processing equipment. Event provides ideal opportunity for the providers of the agricultural products, technologies and services to meet with Georgian farmers, enterprises and state representatives, exchange valuable information and negotiate agreements.

The aim of exhibition is to introduce consumer to various products and services, connect with each other variety of businesses, which get better chance to succeed in the future as a result of these partnerships, also to introduce Georgian market to foreign officials, who are looking for partners for the distribution of their products in Georgia.

For more information see www.agroexpo.ge

WorldFood Kazakhstan 2017

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WorldFood Kazakhstan 

November 1-3, 2017

Atakent exhibition center, Almaty, Kazakhstan

WorldFood Kazakhstan is a wide-ranging exhibition, showcasing the very best products on Kazakhstan’s food and drink market. The event has become a major meeting place for the industry, welcoming thousands of visitors from Kazakhstan and the wider Central Asian region.

WorldFood Kazakhstan has proved an effective forum for promoting new products, discovering more about the local market and meeting professionals within the industry, including producers, distributors, wholesalers, retailers and restaurateurs.

For more information see: www.worldfood.kz