Author Archives: CrispConsulting

European Union to Suspend Tariffs on Ukraine Imports for One Year

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At the end of April, the European Commission proposed a one-year suspension of import duties on all Ukrainian goods not covered by an existing free trade deal to help the country’s economy during the war with Russia. The measures will, in particular, apply to fruit and vegetables, subject to minimum price requirements, agricultural products facing quotas, and certain industrial goods, tariffs on which were only due to being phased out by the end of 2022. That phase-out, set out in the 2016 EU-Ukraine free trade agreement, applies to fertilizers, aluminum products, and cars.

On Wednesday, Ukrainian president Volodymyr Zelensky claimed to have discussed the proposal with EC president Ursula von der Leyen and wanted to express his gratitude: “Right now, this will allow us to maintain economic activity in Ukraine, our national production, as much as possible. But this decision needs to be considered not only in the Ukrainian context. Sufficient export of our products to European and global markets will be a significant tool against crises.”

The proposal will now need to be agreed on by the European Parliament and EU governments to come into force.

freshplaza.com

Strawberries are Getting Cheaper in Ukraine

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The season of strawberries in Ukraine began a few weeks ago, but strawberry growers are already forced to reduce prices. So far, only some farms in the southern regions of the country have started harvesting in heated greenhouses.

At the same time, if the prices for the first batches of strawberries were at an average of 200 UAH/kg ($6.84/kg), today the growers were forced to reduce prices to 150-180 UAH/kg ($5.13-6 ,15/kg), which is on average 25% cheaper than a week earlier.

Producers believe that the downward price trend will only intensify in the near future, since relatively cheap strawberries grown in Greece and Spain are offered in sufficient volumes on the market at 120-150 UAH/kg ($4.10-5.13/kg). A rather low demand also has a negative impact on prices in this segment. At the same time, most producers of strawberries have problems with the sales due to hostilities in some regions of the country. Some consumers were also forced to leave the country.

We add that the main offer on the Ukrainian market today is greenhouse strawberries. According to growers’ forecasts, open field strawberries will go on sale in the end of May.

east-fruit.com

Prices for Last year’s Cabbage Went up in Ukraine

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Most Ukrainian producers have announced the completion of sales of cabbage of the 2021 harvest. Today the supply of last year’s cabbage on the market has significantly decreased, while the demand is quite high. Thus, farmers, who still have cabbage from the 2021 crop in their stocks, began to raise prices.

According to the project’s daily monitoring data, prices for last year’s cabbage in Ukrainian farms rose by an average of 19% over the week. Today, farmers sell it at 14-18 UAH/kg ($0.48-0.62/kg).

First of all, a significant reduction in the supply of cabbage on the market caused by the depletion of stocks in the farms allows producers to raise prices. At the same time, the demand has grown much this week, which also keeps prices up.

It should be noted that current prices for cabbage harvested in 2021 in Ukraine are already on average 2.8 times higher than last year.

east-fruit.com

Russia Faced with Drop in Cargo Traffic and Container Deficit

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Russia is bracing for a sharp decline in cargo flows and a deficit of containers after major international container shipping lines halted operations in the country due to Moscow’s military campaign in Ukraine.

The world’s three largest container shipping lines, Denmark’s Maersk, France’s CMA CGM and Swiss-based MSC, have suspended their bookings to and from Russia after Moscow sent troops into Ukraine on Feb. 24, sparking a flurry of Western sanctions.

The exit of major container shipping companies — which transport most manufactured goods around the world and are essential to international trade — is expected to cause a major decline in shipments if no alternatives to these firms are found soon, according to the head of Delo Group, Russia’s largest container operator.

freshplaza.com

Onion Prices in Ukraine are Falling Due to Imports

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Ukrainian onion growers are forced to reduce the prices. According to them, the reason for this price trend was the increase in the supply of onions on the market, caused by increased onion imports from Poland and the Netherlands.

As a result, today onions from local farms are offered at 10-14 UAH/kg ($0.34-0.48/kg), which is on average 14% cheaper than at the end of the last work week. At the same time, most market operators note that almost 80% of onions on the domestic market of the country are imported. The reason is that the main stocks of onions are currently concentrated in the southern regions of the country, which, due to constant hostilities, cannot ship to other regions.

Meanwhile, according to the growers themselves, the quality of onions in storage continues to deteriorate rapidly, which, in turn, may lead to a further decrease in selling prices in the segment.

Despite the reduction in the price of onions, today they cost on average 2.9 times more than in the same period last year in Ukraine. Key market players explain such a price difference by a break in supply chains in most of the country, which greatly complicates the supply of both local and imported onions.

east-fruit.com

Russia Cancels all Restrictions on Supply of Tomatoes from Azerbaijan

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Russia has canceled all restrictions on the supply of Azerbaijani tomatoes. Russian Ambassador to Azerbaijan Mikhail Bocharnikov said: “Azerbaijani tomatoes are supplied to Russia easily. The Russian Export Center has tools to support the import of Azerbaijani goods.”

The ambassador added that Azerbaijan exported tomatoes worth $1 billion to Russia in 2021. “Azerbaijan’s export to Russia increased by 38 percent during two months of 2022 compared to the same period of 2021 and reached $123 million,” Bocharnikov said.

freshplaza.com

COSCO Continues Trading with Russia, Unlike Other Shipping Companies

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The vast majority of the global container shipping companies have temporarily halted their cargo bookings to and from Russia due to Putin’s invasion of Ukraine. The Chinese ocean carrier COSCO Shipping, however, still offers services in Russia.

COSCO Shipping continues to transfer goods to Russia with its tanker fleet transporting crude oil, which is Russia’s major export commodity to China.

“COSCO is offering economic succour for Russia as it faces a barrage of economic sanctions from various governments,” said Sathiya Jalapathy, business fundamentals analyst at data and analytics company GlobalData.

On the other hand, MSC, which operates in Russia through its subsidiary MSC Rus, stopped accepting cargo bookings to and from Russia, covering the Baltic Sea, the Black Sea, and Far East Russian regions.

In addition, CMA CGM’s Russian subsidiary, with nine offices in the country, including Saint Petersburg, Novosibirsk, Yekaterinburg and Moscow, serving seven Russian ports, has suspended its operations.

Maersk has also halted temporarily its container shipping operations to and from Russia, announcing the suspension of its ocean and inland cargo bookings, while the Danish shipping company intends to sell its 30.75% stake in the Russian port operator Global Ports Investments.

Furthermore, HMM halted cargo bookings on two of its shipping routes to and from Russia, with low demand, with a capacity of 1,700 TEU on each container vessel, on the Busan to Vostochny and Busan to Vladivostok routes. However, the company stated that this stoppage will not have any impact on its performance and that it will fulfill previous bookings.

The Singapore-based Ocean Network Express has also suspended cargo bookings to and from Odessa in Ukraine, and Novorossiysk and Saint Petersburg in Russia, according to Global Data.

Moreover, German Hapag-Lloyd, which operates in the country through offices in Kaliningrad, Moscow, Novorossiysk and Saint Petersburg, has also stopped bookings to and from Russia, Belarus, and Ukraine.

However, essential goods such as medical equipment, food, and humanitarian aid continue to be transported according to the data and analytics company GlobalData.

“The decision by many global shipping companies to halt their services to Russia could put the country in a difficult position as it will struggle to import goods such as motor vehicles and spare parts, industrial machinery and equipment, apparel and electrical machinery,” commented Sathiya Jalapathy.

freshplaza.com

Russia Now Hopes to Replace European Imports with Goods from South Africa

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Russia wants to expand its commercial presence in Africa as recent sanctions are impeding the trade with its European neighbors. A meeting on supporting Russian organizations entering African markets saw “a proposal to expand the network of trade missions to Africa in priority countries for trade”, said the vice president of the Chamber of Commerce and Russian industry, Vladimir Padalko. This plan must now be implemented by the various Russian ministries, including those of trade and foreign affairs.

The European Union was previously Russia’s largest trading partner, with more than a third of Russia’s total imports from the EU, even after Russia’s annexation of Crimea, causing a general cooling of relationships. Economic sanctions imposed since the invasion of Ukraine have already made this trade difficult and expensive. Today, EU members are considering a Ukrainian request to expel Russia from the World Trade Organization and impose tariffs on trade with Russia, further discouraging Russian businesses.

Russia currently has four trade missions in Africa, including three in North Africa, Algeria, Egypt and Morocco. Its trade mission in South Africa has been greatly enhanced by cooperation within the BRICS, but Russia’s trade with South Africa remains minimal.

In 2021, South African exports to Russia totaled just over R6 billion and imports from Russia totaled R9.2 billion. Padalko stated that Russia hopes to source some of its current imports from Europe from Africa, including tea, coffee and fruit, which make up a significant portion of South Africa’s current trade with Russia.

freshplaza.com

The Сonsequences of the Invasion of Ukraine in the Potato Sector

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The French Potato Interprofessional (CNIPT) has published in its latest bulletin an analysis of the consequences that the war initiated by Russia in Ukraine could have on the potato sector.

According to the CNIPT, the situation in Ukraine could amplify the already high inflation in the costs of agricultural raw materials, packaging, and, mainly, energy. “We expect strong tensions on energy (Russia is the leading exporter of natural gas to the EU, accounting for 44% of its imports) and by extension on the price of nitrogen fertilizers. Tensions over oil are likely to increase. Thus, logistics flows would be interrupted by transport difficulties (road and sea), costs, and lack of drivers.”

“The war will most likely affect the current flows of conservation potatoes to the countries of Central and Eastern Europe,” the interprofessional stated. “Ukraine is a major producer of this tuber, but due to its significant domestic consumption, it imports nearly 250,000 tons each year. Its main suppliers are Poland, Lithuania, and Romania. France doesn’t export much product directly to Ukraine, but it sends significant flows of potatoes to neighboring countries that re-export them to Ukraine. ”

“Russia imports up to 100,000 tons of frozen chips (and other processed potatoes), exclusively from the EU (Netherlands, Poland, Germany, Belgium, and France). The conflict could paralyze these flows which would be transferred to other destinations.”

“The potato’s advantage in these times of crisis is that it contributes strongly to France’s food sovereignty and constitutes a qualitative and healthy refuge food for all European populations,” the CNIPT highlighted.

freshplaza.com