Market News

Potato Union Formed in Russia

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The Russian Ministry of Agriculture reports that these will be the main goals of the Union:
– coordinate business activities of the Union-members
– contribute to the formation and development of the national potato and vegetable market
– create a viable economical, legal and social environment for the potato and vegetable market participants
Along with these goals the Union will have the following tasks:
– improve production, storing, processing, transportation and wolesale distribution facilities
– conduct scientific researches and advance the corresponding technologies in order to implement them into the business activities of the Union-members
– contribute to working out of the unified certification and standardization rules for potato and vegetable produce

Source: www.fruitnews.ru

Russian Retail Market: the Number of Hypermarkets Grew by 50% a Year

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2004 there were recorded 61 hypermarkets in Russia, in 2007 there were already 214. 2008 the growth declined by 27%, in 2009 there were only 2 new hypermarkets opened. 2010 the growth accelerated again and the number of hypermarkets grew by 16% and reached 318 (not including cash&carry format stores).

Source: www.product.ru

A New Round of Russia’s WTO Accession Consultations in Geneva

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The Working party has started the regular consultation round on Russia’s accession to WTO. During the informal talks the WTO-members will study Russia’s suggestions upon some sections of the Working party report, considering customs formalities, export duties as well as the pricing policy. The Russian delegation will also hold an informal multi-party consultation on agriculture, meat market access, Russia’s commitments in the sphere of agriculture.

Source: www.tks.ru

X5 Retail Group to Impose Obligatory Nitrates Concentration Tests for Fresh Produce

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X5 Retail Group reported that it imposes obligatory nitrates concentration control in all of its distribution centers. Until now such tests were carried out occasionally by specialized laboratories – only during high season or when the imported fruit and vegetables looked suspicious.

The company acquired 17 mini-labs and 17 portable testers, registered in the State registrar of measurement devices, which allow carrying out primary express-checks of the nitrates level directly near the truck.

X5 Retail Group is Russia’s largest retail company which owns “Pyaterochka”, “Perekrestok”, “Karusel” retail chains and discounter chain “Kopeyka”.

Source: www.business-magazine.ru/spb

Russian Retail Companies Become Importers to Reduce Price Growth

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Fruit import can hardly be considered as a high-yield business: the average profitability is about 5% due to the intense competition and the companies’ liability to keep the price level low. Direct import allows to improve the quality of the product range by reducing the supply chain and to make the retail prices more competitive.

Among the largest Russian retailers it is only X5 Retail Group which isn’t planning to become an independent importer. Russian retail chain Dixy has started its own import of fruit and vegetables which account for 12% of the total turnover. At the moment the chain imports 50 items of this category – about a half of the fruit and vegetables range.

Metro Group Buying provides Metro Cash & Carry with 80% of the imported produce. The company’s representative says that the share of the imported goods will grow. The French hypermarket chain Auchan imports fruit and vegetables from Spain and Portugal.

Source: www.foodretail.ru

Fruit import can hardly be considered as a high-yield business: the average profitability is about 5% due to the intense competition and the companies’ liability to keep the price level low. Direct import allows to improve the quality of the product range by reducing the supply chain and to make the retail prices more competitive.

Among the largest Russian retailers it is only X5 Retail Group which isn’t planning to become an independent importer. Russian retail chain Dixy has started its own import of fruit and vegetables which account for 12% of the total turnover. At the moment the chain imports 50 items of this category – about a half of the fruit and vegetables range. Metro Group Buying provides Metro Cash & Carry with 80% of the imported produce. The company’s representative says that the share of the imported goods will grow. The French hypermarket chain Auchan imports fruit and vegetables from Spain and Portugal.

Regions Ranked for Business Climate

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As a place to do business, Tatarstan came in first and Moscow last in a survey, conducted by the New Economic School. The survey listed 15 obstacles to business success and asked participants (100 CEOs in each of 10 regions) to rank them in terms of significance. Moscow respondents indicated all but one problem were worse in the city than they are nationwide.

The other regions participating in the survey were Irkutsk, Kaluga, Perm, Rostov, Tver, Tomsk, Voronezh and St. Petersburg. The researchers identified the four most common problems for all of the regions: lack of skilled work force, strained access to funding, corruption, and competition from the “gray” rivals. However, the business environment was very diverse in these regions.

Source: www.themoscowtimes.com

The Country with the Highest Number of Billionaires

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According to Forbes the USA with 413 US Dollar billionaires of the total 1,210 in the world tops the list of highest number of billionaires. China with 115 billionaires ranks number 2. Russia boasts 101 US Dollar billionaires and ranks number 3 in the list. During 2010 their number in Russia has grown by 30%; in China by 47% and in the USA by only 3%.

Source: http://top.rbc.ru/economics/

Ruble hits 2-year high against dollar

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The Russian ruble hit fresh highs Wednesday, a day after the central bank announced it had widened the trading corridor it uses to manage volatility in the currency.

Russia’s currency closed at 28.55 rubles against the dollar, its highest level since December 2008. It traded at 33.31 rubles against a basket of euros and dollars, its highest level in two years.

A wider trading corridor is intended to promote a stronger ruble and help the central bank keep a lid on inflation, which has surged amid a crippling drought last summer and a rapidly growing money supply.

The currency may strengthen to 33.0 rubles versus a basket of dollars and euros as traders try to test the currency’s new trading corridor, which was widened to five rubles by the central bank, VTB Capital said.

Source: online.wsj.com

Walmart cashes out of Russian Retail

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Walmart is not the only major international retailer to pull out of Russia in recent years after failing to establish a viable business in the country. In October 2009, French retail giant Carrefour announced it was pulling out after opening just one shop in Moscow and another in the southern city of Krasnodar.
The discount retail sector in Russia, where Walmart operates, is severely underrepresented.
There are only two international hypermarket chains, Auchan and Real, operating in this sector, so the market is certainly not saturated. Walmart International CEO Doug McMillon said that Walmart will continue to pursue market entry opportunities

Source: en.rian.ru

Russia’s Inflation Rate Higher than in the Ukraine and Belorussia

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Rosstat (Russia’s State Statistics Office) with reference to Eurostat reported that in January 2011 inflation in Russia was the highest in Europe. In January 2011 the inflation rate was as high as 2.4%. The average inflation rate in 2010 was reported to be 8.8%.

As for food prices, during January-February 2011 they have risen by 3.2%, the annualized price growth in 2010 was 16.4%.

Source: http://top.rbc.ru/economics/