Russia to completely ban import of GMO products

Russian State Duma has adopted the first draft law which completely prohibits the import and cultivation of any agricultural products containing genetically modified organisms (GMO) as of April 24. The deputy head of the Russian Ministry of Science and Education Nataliya Tretiyak reported the only exception will be made for scientific and research studies.

GMO products need to be registered according to the new law

The draft law also creates a system of expertise of imported production on the presence of GMO. All production containing genetically modified organisms should be registered and included in the special database. The new law will affect the part of import supplies of feedstuffs, as so far in Russia 12 breeds of GM-corn and 6 breeds of GM-soybeans have been approved.

“If we are speaking about absolute figures then we are talking about 2 million tonnes of soybeans and 53,000 tonnes of corn” stated Tretiyak. Russia has been almost completely using GM soybeans and corn as raw materials for compound feed production.

Tougher penalties needed for breaking the new GMO law

At the same time, a number of members of the Parliaments called to implement more tough liability for subject which will violate the new rules. The draft law provides fines of maximum RUB 500,000 (US$ 10,000), which according to experts is very low. “We should take into account that the profit from cultivation GMO crops in Russia exceeds the profit from raising non-GMO production” commented Parliament member Vladimir Fedotkin.

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Simplified regime for the Russian customs clearance at border with China

Plans to introduce simplified procedure are to start in May in the territories bordering Russia, according to the General Administration of Customs of China. Interfax also quoted a statement from Zhang Chuntszyao, chairman of the Association of Applied Economics, Heilongjiang Province, stating similar actions.

The goal will be to simplify administrative procedures and transfer powers to the lower levels of customs control. Entrepreneurs are expected to be able to select a location for processing and filling.

“The company’s customs and brokerage services will have the right to register in one place, but legalizing documents of declaration in different places. Companies, which have set up branches in the region, will be able to make declarations in the region,” Chuntszyao said.

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Retailers announced downturn in prices

Suppliers explained the price increase with the increase of product cost in foreign currencies during the devaluation of the ruble. Now retailers are waiting the same trend when the ruble is strengthening.

Director of External Communications of Auchan Russia said that prices have already fallen for cereals and canned food. As for fresh products, seasonality is very important: for example, prices for fresh fish has fallen by an average of 30% since December 2014 due to seasonality and ruble prices.

Most retailers have their own import departments, and it is easier for them to revise the prices for some imported products, they can more quickly react to changes in exchange rates. “The most notable changes can be seen in prices of vegetables, fruits, fish and seafood,”- said the representative of the Russian network of Metro Cash & Carry. Prices for fruits and vegetables have decreased by 10-11%, prices for fish – by 10-15%.

Negotiations between retailer and suppliers are in the process.

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Russia’s President and Greek Prime Minister discussed how to bypass the Russian food ban

April 8, Russia’s President Vladimir Putin met Greek Prime Minister Alexis Tsipras in Moscow. Beside other economic and political issues, they discussed the Russian food ban. Putin said that Russia couldn’t make exception for one country and that ending sanctions would be the best way. Putin said that Russia could not make an exception for Greece and lift the food ban only for that country,  but there was an opportunity for compromise: to organize joint ventures of Russian and Greek companies, in this case Greek products could be imported to Russia. “It will not cause any harm to our producers, as they will be involved in the process,” – said Vladimir Putin.

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Russian inflation at fastest in 13 years after ruble crisis

Russian inflation accelerated in March to the fastest on an annual basis since 2002 even as slowing weekly readings allow the central bank to press ahead with cutting borrowing costs. Consumer prices rose 16.9 percent from a year earlier, compared with 16.7 percent in February, the Federal Statistics Service in Moscow said in a statement. The median estimate of 20 economists was 16.8 percent, according to a Bloomberg survey. Prices gained 1.2 percent in the month.

Bank of Russia has started to ease monetary policy this year, following six increases in the benchmark rate last year, as the world’s biggest energy exporter enters its first recession since 2009. The economy has replaced inflation as the population’s top concern, according to a survey published by state-run pollster VTsIOM on March 31.

“Price growth could have peaked over March,” Dmitry Polevoy, chief economist for Russia and Commonwealth of Independent States at ING Groep in Moscow, said by e-mail before the statement. “It’s important that weekly and monthly inflation continue to decelerate.”

The balance of risks has shifted toward “a more significant cooling of the economy,” the central bank said in a statement March 13 after reducing the benchmark rate by 100 basis points to the current 14 percent.

Gross domestic product may shrink as much as 4 percent in 2015 and continue to deteriorate until the first quarter of next year, Bank of Russia Governor Elvira Nabiullina said after the March 13 decision. The regulator will consider further easing if inflation expectations slow, she said. The next meeting on rates is scheduled for April 30.

Price growth has started slowing on a weekly basis. It stabilized at 0.2 percent each week in March, the lowest since November. Weak economic activity will act as a brake on inflation, while the impact of ruble depreciation and trade restrictions that ignited price growth will wear off this year, according to the central bank.

The Russian currency has strengthened this year, showing the best performance among emerging markets in February and March. The ruble gained 1.4 percent to 55.8110 against the dollar as of 3:54 p.m. in Moscow.

“The central bank will in our view have ample room to cut rates more aggressively than priced,” Goldman Sachs economists said in e-mailed report April 2.

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Russia offers “green corridor” for Middle East produce

The President of the Russian Customs Service, Andrei Belianinov, announced this Wednesday that Egypt, Jordan and Turkey have been offered the creation of a “green corridor” to facilitate the supply of fruit and vegetables from these countries to the Russian Federation.

During his speech in front of the Russian Duma, Blianinov stated that Moscow has issued the proposal to Egypt, Jordan and Turkey, as well as Azerbaijan, to facilitate the supply of perishable products and ensure their freshness on arrival.

It is worth mentioning that other countries, like Syria, also seek to create a “green corridor” with Russia, so as to facilitate the transfer of goods and agricultural products to Moscow, since the size of the Russian market is estimated at 12 billion Euro per year.

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Belarusian customs statistics: Belarus as a transit channel of banned products to Russia

According to official data of the Belarusian National Statistics Committee in 2014, after the introduction of Russian food ban on the supply of food and agricultural products from the EU, Norway, USA, Canada and Australia in August last year, trade structure in the country changed significantly. The official data of the Belarusian customs statistics indirectly confirm that Belarus became a transit channel for import of banned products to Russia after the introduction of Russian food ban.

Belarus increased the imports of items that are in the Russian list of banned products from the countries that came under the Russian sanctions. And at the same time the export of the these types of products from Belarus to Russia increased.

While the overall Belarusian exports to Russia decreased by 8.9% in 2014 down to $ 15.3 billion, the volume of export of food and agricultural raw materials from Belarus to Russia increased significantly. The main growth was for banned goods:  the import to Russia of vegetables increased by 87.2% up to $ 262.5 million, the import of fruits by 64% up to $ 171 million, the import of fish and seafood – by 44.1% up to $ 138, 2 million.

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Russian food ban may be partially lifted

Russia on road to partial end boycott

The Russian phytosanitary authorities have started a procedure to resume the import of animal products from Greece, Cyprus and Hungary. The Russian inspection will first visit the countries for an inspection, beginning in Greece. The visits are planned for April. Included in the list of companies to be visited are firms in Germany, France and Poland.

Agreement Albania and Russia on trade
Albania and Russia have reached an agreement on resuming Albanian export to Russia. Earlier this year, Russia denied it was working on lifting the sanctions against Albania, now the end seems in sight for the trade ban.

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Temporary ban on Egyptian potato imports

Russia’s Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor) has imposed a temporary ban on the import of potatoes from Egypt.

The reason is the frequent violation of regulations in the field of plant quarantine. Russian phytosanitary services detected brown rot bacteria and golden cyst nematode in Egyptian potatoes. Since the introduction of the EU embargo on fruits and vegetables, the import of Egyptian potatoes by Russia exceeded 300 thousand tonnes.

 

EU Sanctions against Russia prolonged

The EU leaders have decided to maintain the economic sanctions against Russia until the end of this year, as said in a statement published last week after the meeting. The sanctions are to remain in force at least until the Minsk agreements are carried out. That won’t be before the end of this year. This outcome is a compromise between proponents and opponents of the sanctions against Russia.

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