Market News

Rosstat Reports Sharp Rise of Fruit and Veg Prices in Russia

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Rosstat reports that over the past month, lemon prices in Russia have become 2.5 times higher. According to experts, this was due to rumors that the fruit supposedly helped protect you against the coronavirus. Other fruits and vegetables also recorded significant increases in April.

Statistics show, in that month, the price of onions rose by 49.9%; garlic became 25.7% more expensive; the cost of cabbage and carrots increased by 17.1%; potatoes saw their price rise by 16%, and that of beets by 10.7%. Apples went up by 8.8% and oranges, by 8.4%. At the same time, the cost of cucumbers fell by 20.6%, and that of tomatoes, by 10.3%.

Experts believe that the increase in fruit and vegetable prices is clearly linked to an increase in the cost of products in general.

www.freshplaza.com

Turkey: Mandarin Exports to Russia Increased by 49%

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In the first quarter, Turkey’s mandarin exports to Russia increased by 49% in terms of value and 37% in terms of quantity.

According to the Eastern Black Sea Exporters Association (DKIB), in the same period, Turkey exported 81 776 MT of mandarins to Russia and earned 49.8 million USD. Last year, Turkey exported 59 725 MT of mandarins in exchange of 33.5 million USD.

Trabzon, a city in the Black Sea Region, was the only mandarin exporter from the region. In this period, the city exported 14 638 MT of mandarins and earned 9 million USD.

The association’s (DKIB) vice-chairman Ahmet Hamdi Gurdogan announced that the 2019-2020 citrus season is going well and that they work towards the next season.

Pointing out to the coronavirus pandemic and its impact on global trade, Gurdogan stated that export costs are constantly increasing. “It is important to lower export costs. State support is crucial to achieve a competitive position in the market. Our exporters’s expectations are in the same line”.

www.freshplaza.com

EAEU Allows Temporary Duty-Free Imports of Critical Foods

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On April 3, 2020, the Eurasian Economic Commission (EEC), which is the regulatory body of the Armenia-Belarus-Kazakhstan-Kyrgyzstan-Russia Eurasian Economic Union (EAEU), issued EEC Council Decision No. 33, introducing a temporary exemption from import duties for critical food products, such as potatoes, onions, garlic, cabbages, rice, rye, buckwheat, etc., as part of the EAEU coronavirus pandemic response.

The measure, which comes into effect on April 18, 2020, will apply to products imported as of April 1, 2020, and last through June 30, 2020. This report contains an unofficial English translation of the measure.

www.fas.usda.gov

Maersk Launches its Cold Store in St. Petersburg, Russia

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Nine months after the construction began in June 2019, the chilled capabilities of Maersk’s own cold store in St. Petersburg are operational, addressing the needs of a high-demand Russian market. In the near future, the facility will also offer freezing capabilities in a separate storage chamber for frozen produce (-25°C).

The first container to arrive at the new warehouse brought pears from Argentina after a 26-day journey and was unloaded swiftly into the chilled chamber operating at a temperature of 0.5 Celsius. In total, more than 60 Maersk’s refrigerated containers were scheduled to arrive at the facility as part of the end-to-end service from Argentina, as well as grapes and apples originating from South Africa.

“The full end-to-end offering will allow our customers to enjoy the shorter overall lead time, predictable costs and best in class service,” said Zsolt Katona, Managing Director, Eastern Europe at Maersk during the inauguration of the first reefer container.

The new cold store operated by Maersk has a total capacity of more than 40 000 pallets in 3 chambers and uses CO2 cooling, which makes it the largest commercial cold store in Russia using this new technology. Over the next months, as part of its Cold Chain Management product, Maersk will also establish on-site customs clearance, bonded cold storage (frozen) and phytosanitary/veterinary services, as increased interest by both current and prospective customers underpins Maersk’s strategy of providing integrated solutions for reefer logistics.

www.freshplaza.com

 

Changes in Russian Retail Due to the Covid-19

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Russian retailers have been rocked for the past six weeks as epidemic fears were mounting among the population. Even before the shutdown of many offline outlets—which was ordered in Moscow on March 31—online demand surged across a host of products.

Conservation-type food products became in strong demand in late February, with market leader Utkonos reporting a 60% sales spike in comparison with the same period of last year.

E-commerce companies also reported a rush, sometimes fleeting, on many other food items as well as on refrigerators and other home essentials.

In the first “non-working week” (as the authorities call the lockdown), from March 30 to April 5, Russians’ consumption habits changed drastically. The number of online orders at cafes and restaurants increased by 78% in comparison with the last week of February, according to Yandex.Checkout, the online payment arm of Yandex.

Delivery activities are being transformed by the epidemic. In March, restaurants and cafés massively switched to online orders, forcing Delivery Club, a market leader, to simplify its integration procedures.

X5 Retail, a leading Russian food retailer, has begun installing self-checkout machines across its Pyaterochka proximity stores. Tested successfully in August and September last year, these self-checkouts are now already installed at 369 stores. The plan for 2020 is to have a total of 12,000 units operating. “Through mass implementation of self-service technologies, [we] seek to minimize contact between customers and store personnel,” the company stated.

www.digitalcommerce360.com

Russia’s Inflation Picks Up After Ruble Crash

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Russia’s inflation rate rose to 2.5% in March, official statistics showed Monday, reversing a months-long trend of slowing increases in consumer prices and an early indication of the impact of a crash in the value of the ruble and the coronavirus pandemic.

The year-on-year inflation rate ticked up in March from 2.3% the month before, mostly due to an increase in food prices, according to the state statistics agency.

Russians started to stockpile food in March amid the coronavirus pandemic, which hit Russia shortly after oil prices and its currency the ruble slumped as a result of a collapse in talks between Russia and the OPEC cartel.

Among food prices most affected were those for sugar which rose by 13.5% on average, while grains and legumes were up by 13.4%, and butter by 9.2%.

The Central Bank warned on March 20 that the ruble’s depreciation could spark price increases, but insisted this would only be “temporary” and would be offset by the slowdown of the global economy.

The central bank added that inflation could now surpass the government’s objective of 4% for the year.

February’s inflation rate of 2.3% was the lowest in two years.

www.themoscowtimes.com

An Increase of 33% in Greenhouse Vegetable Production in Russia

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As of March 17, 2020, 198,400 MT of vegetables were harvested in winter greenhouses, which is 33.6% higher than in 2019 (148,500 MT). The yield of greenhouse cucumbers is 142,000 MT (+42%), tomatoes – 52.500 MT (+ 17.7%), green crops – 3,900 MT (+39, 2%).

In 2019, the gross harvest of vegetables in winter greenhouses amounted to a record of 1.14 million MT. This is 14% more than in 2018 and 26.7% more than the average for the last five years. The leading regions are the Lipetsk, Moscow, Krasnodar, Stavropol, and Volgograd regions.

This year, the Ministry of Agriculture of Russia also expects a record production of greenhouse vegetables – at least 1.25 million MT, which is 6.1% higher than in 2019.

Over 5 years, more than 1,200 hectares of high-tech greenhouse complexes have been built and modernized. Production volumes have increased by 87.9% compared to 2014. By 2025, the Ministry of Agriculture plans to increase the production of greenhouse vegetables to 1.6 million MT.

www.mcx.ru

In Russia, the List of Fruits and Berries Taxed at a Reduced VAT Approved

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New HS codes were added to the list of food products taxed at a reduced VAT rate (the decree of the Government of the Russian Federation No. 1952 dated 12/31/2019). Fruits and berries from the list are subject to 10% VAT instead of 20% from October 2019.

In particular, it concerns Russian and imported fresh fruits: apples, pears, quinces, all categories of citrus fruits, grapes, apricots, cherries, cherries, peaches, nectarines, plums, thorns and cherry plums, watermelons, melons, papaya, avocados, dates, figs, pineapples, guava, mango, mangosteens, kiwi, persimmon, barberry, feijoa, medlar; berries: strawberries, raspberries, blackberries, black, white or red currants, gooseberries, cranberries, blueberries, blueberries, cornel, wild berries; as well as planting material of fruit and berry crops: seeds, seedlings, roots, cuttings, and layering.

Bananas, plantains, nuts, as well as any kind of fruit and berry processing products, are not included in the list.

The full version of the document can be found on the Official Internet portal of legal information.

www.fruit-inform.com

Turkey to Resume Tomato Exports to Russia

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On March 7, after a month-long disruption due to the yearly quota limit, Turkish tomato exports to Russia have resumed. Moscow decided to lift the yearly quote from 150,000 MT to 200,000 MT after some containers carrying Turkish tomatoes were returned last month, saying that the quotas were already met.

“We exported 98,000 MT of tomatoes to Russia in 2019. Turkish exporters can send 50,000 MT [of tomatoes] in a couple of months. Thus, we want the quote to be removed completely,” said Hayrettin Uçak, chairman of the Aegean Union of Fresh Fruit and Vegetable Exporters.

Turkish Trade Minister Ruhsar Pekcan and Agriculture Minister Bekir Pakdemirli are in talks with their Russian counterparts to lift the quotes in bilateral trade and they expect the trade diplomacy to bear fruits in the upcoming months, said Uçak.

Turkey’s tomato exports to Russia increased 181% in 2019, bringing the country a total of $74.5 million.

In January 2016, after Turkey downed a Russian fighter jet violating its airspace, Russia banned imports of Turkish fruits and vegetables including tomatoes, oranges, apples, apricots, cabbage, broccoli, mandarins, pears, peaches, cucumbers, plums, strawberries, onions, cloves, and poultry.

Russia relaxed these trade sanctions during the summer of 2017.

www.freshplaza.com

Rising Price of Imported Pears in Russia

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In winter, imported products traditionally prevail in the pear market in Russia, reported EastFruit project analysts. The main countries supplying pears during this period are Argentina, Belgium and the Netherlands. At the same time, it is worth noting that prices for imported pears have always been significantly higher than for domestic products. And today, prices for imported pears continue to rise.

According to market operators, the main reason for the fairly high prices in this segment is the growing demand for these fruits and the low yield of pears in most EU countries and the countries of the Southern Hemisphere this season.

On the Russian market, imported pears are consequently sold for 114-150 rubles / kg ($1.74-2.29/kg), which is on average 14% more expensive than at the end of the previous working week.

According to market participants, several factors explain the price increase. Firstly, the supply in the countries that traditionally deliver these products to the Russian market during the winter is already running out, and therefore it can be difficult to acquire the volumes needed. Secondly, fluctuations in exchange rates continue to have an impact.

It is worth noting that at the moment, imported pears in Russia are already on average 15% more expensive than at the end of February last year. This price increase does not please the suppliers of imported products, since the consumption of pears in Russia will fall rapidly as they rise in price. Importers believe that further appreciation of these fruits may lead to a sharp drop in the volume of pear imports to Russia.

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