Market News

Putin: Import Substitution in Russia is Temporary Phenomenon

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The import substitution in Russia is a temporary phenomenon, a temporary tool for adjusting the current situation, President Vladimir Putin said on Wednesday.

“The idea of import substitution itself is not universal and is not what we should strive for in the long run, because import substitution should not undermine competition. This is an extremely important thing,” Putin said at a meeting with women entrepreneurs.

“We should understand, that all this import substitution is a temporary phenomenon. I want you to understand this. This is a temporary tool to adjust to the current situation,” he stressed.

“We should aim at producing such products of such quality and at such a price that it is competitive not on our own, but on the world market,” Putin added.

According to him, import substitution is primarily related to ensuring the security of the country, for example, in the defense industry. As an example Putin mentioned the fact that Russia has begun to produce marine engines, engines for helicopters, and this is being done compulsorily.

“In some cases we did it and are doing it to support the domestic producer in difficult economic conditions, especially in the situation when our partners violate and distort competition by imposing different sanctions, which are politically motivated, as they claim, but in fact are based on the ambition to gain an advantage,” he added.

www.tass.com

Azerbaijan: the Main Tomato Supplier to Russia in 2017

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Russian media, the citing Federal Customs Committee, reported that Azerbaijan was the leading tomato exporter to Russia in 2017.

Azerbaijan increased its export volume by 50 percent to 151,000 MT (worth some $151 million dollars). Azerbaijan’s share in the Russian tomato import increased from 22 percent in 2016 to 30 percent in 2017.

According to en.trend.az, Russia accounted for 99.8 percent of Azerbaijan’s total tomato export in 2017. China held the second place with 109,000 MT (a 26 percent year-on-year increase). Morocco went down to the third place (from the first place it held in 2016). The country’s share correspondingly decreased to 23 percent with 97,000 MT. Belarus with 70,000 MT and Iran with 9,000 MT also entered the Top 5.

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Russian fruit and vegetable imports partially recovered

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When compared to the previous year, Russian imports of fresh fruit and vegetables have increased considerably over the last year. A total of 7,1 million MT was imported, 17% more than in 2016. It is, however, not nearly as much as in 2013. In the year before the boycott came into force, Russia imported almost 8,5 million MT of fresh fruit and vegetables.

The (partial) recovery of the imports is, firstly, due to the boycott of various Turkish products being lifted in 2017. In addition, a record volume of (Ecuadorian) bananas and products from other countries were imported. The most important of these countries are China, Egypt, Azerbaijan, and Moldova. The record volume of banana imports is particularly noticeable. Last year, Russia surpassed Germany and is now the second largest importer of bananas in the world, besides the United States. Russia also imported a record volume of mandarins, it’s second most popular import product. Russia is by far this product’s most important import country. Russia’s import volumes of all other regularly consumed products also rose in 2017. This country’s import volumes of lesser-known products, such as kaki, garlic, watermelon, celery, avocado, and mangoes, also reached record highs in the past year. (more…)

Food Imports Increased in 2017 Pushed by Fruit and Veg Purchases

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The import of food into Russia increased by 6% in 2017, according to data from the Federal Customs Service.

There hadn’t been growth for several years. After the collapse of the rouble and the introduction of the import ban in 2014, the import of products had been greatly reduced. In 2016, the country imported 20% less food than two years earlier.

The main reason why this trend is changing is due to the fact that Russia has been importing more fruit and vegetables.

“The import of fruit has grown due to the greater volumes of cherries and grapes from Turkey, bananas from Ecuador or citrus fruits from South Africa,” explained the Federal Customs Service.

Besides, several countries which are not subject to sanctions have also increased the sale of vegetables to Russia.

Experts say that the stronger rouble is also helping boost imports. The cost of foreign products is declining, and consumption is increasing. This indicates that foreign vegetables are not being replaced by domestic ones, but that people have been eating more vegetables and fruits, so suppliers have been buying more.

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Russian Apple Production is a Long Way From Self Sufficiency

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Despite efforts to become self-sufficient in apple production after the embargo, recent figures confirm that the country is far from being able to produce enough apples to meet domestic consumption.

According to the Ministry of Health, the average Russian consumes 50 kg of apples per year, yet, according to AB-Center, recent total production would only amounts to 5.8 kg per year per consumer. This amount includes all apples, including those for processing, so when it comes to the amount of apples for fresh consumption, the amount per person would fall even lower.

Although it seems like self-sufficiency is far from a reality, Rosstat has estimated that the total production of top fruits, a majority of these being apples, did grow by 15% in 2016. In addition, independent experts have reported that the share of imported products on shelves has, for the first time in many years, given way to Russian apples.

Although apple imports have decreased since the embargo, a recent report from UN Comtrade said that Russia is still number 3 on the list of largest apple importers in the world in 2016, with a share of 6%, totalling 678,600 mt of fresh apples. This amount had already reached 622,200 mt in the first 11 months of 2017.

In the first half of 2017, the majority of apple imports were coming in from Serbia and Moldova, with 32.1% and 26.2%, respectively. Other major suppliers include China, Belarus, Chile, Azerbaijan, South Africa and New Zealand. Bosnia and Herzegovina had also been a significant apple importer to Russia, but this is currently on hold after Rosselkhoznadzor placed a ban on the country following suspicions that they were exporting apples from Poland as their own.

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Agricultural Watchdog Allows Five More Turkish Enterprises to Supply Tomatoes to Russia

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Russian agricultural watchdog Rosselkhoznadzor has allowed five more Turkish enterprises to supply tomatoes to Russia from February 1, 2018, the regulator said in a press release.The permission was granted under the guarantee of the Turkish Ministry of Food, Agriculture and Livestock.

Experts of Rosselkhoznadzor inspected those enterprises in December 2017. “The Federal Service for Veterinary and Phytosanitary Control informs that from February 1, 2018, under the guarantees of Turkey’s Ministry of Food, Agriculture and Livestock, it allowed five more enterprises to import tomatoes of the Turkish origin into the territory of the Russian Federation,” the ministry said.

Russia imposed a ban on imports of a number of farming products from Turkey from January 1, 2016 following the November 2015 incident with a Russian Su-24 fighter jet that was downed Turkish warplanes while returning from an anti-terrorism mission in Syria.

In November 2017, Russia allowed imports of up to 50,000 tonnes of tomatoes from Turkey. So far only three Turkish suppliers have been granted permits to supply tomatoes to Russia. The first shipment of tomatoes was delivered in mid-November 2017.

www.tass.com

Egyptian Fruit and Veg Exports to Russia: 77% of the Total Exports

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Egyptian minister of Trade and Industry, Tarek Kabil, announced that Egyptian exports to Russian markets increased by 32.8% from January to November 2017, reaching $464.8 mln compared to $350 mln during the same period of 2016.

For his part, Ahmed Antar, first deputy minister of Trade and Industry and head of the Egyptian Commercial Service Office, said that the intensive promotional efforts carried out by the Egyptian Commercial Office in Moscow resulted in providing more export opportunities.

Nasser Hamed, head of the Egyptian Commercial Office in Moscow, said that Egyptian exports of vegetables and fruits to Russia increased by 39%. Thereby they were amounting to about $359 mln in the first 11 months of 2017, compared to about $258.5 mln during the same period of 2016.

He pointed out that Egyptian exports of vegetables and fruits to Russia represent 77% of the total Egyptian exports to Russia.

Kabil assured that currently there are still negotiations with the Eurasian Economic Union about the road map for the free trade areas (FTA) agreement, scheduled to be launched in the next few months. The Eurasian Economic Union includes Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan, so this agreement will increase bilateral trade relations between Egypt and the markets of these countries.

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Russia Renews Ban on Import of Apples from Bosnia and Herzegovina

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About a year and a half after the regular export of BiH (Bosnia and Herzegovina) apples in Russia was resumed, the ban is set to take effect again. The reason behind this is that inspections have once more determined that some enterprises in Republika Srpska violate the agreement.

The ban had originally been imposed when there was a problem with the origin of the apples: although they appeared as RS products, they turned out not to be. They  originated, in fact, from other countries. The agreement between Russia and BiH says that apples and other fruit and vegetables must be an original BiH product, not the product from third countries.

Balkaneu.com reported that Minister of Foreign Trade and Economic Relations of BiH, Mirko Šarović, confirmed that the Russian Federation has again imposed a ban on imports of apples from BiH that comes into force Monday, January 22. He explained that the certificate for controversial apples was issued by the phytosanitary inspection in Brcko District, BiH, and transported to the Russian market as a local product.

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Russian Economy Suddenly Shrinks in November

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Russia’s economy unexpectedly contracted in November, hit by a drop in industrial production, the economy ministry said on Monday.

Gross domestic product shrank 0.3 percent year on year in November, the economy ministry said, contrasting with analysts’ consensus call for a 1.5 percent growth.

Russia’s oil-dependent economy was on the mend in 2017 after two years of recession, triggered by a sharp drop in global commodity prices as well as sanctions imposed by Western countries against Moscow for its role in the Ukrainian crisis.

In November, GDP was dragged down by the industrial sector where output contracted 3.6 percent compared with a year ago. The economy ministry said it blamed the weaker industrial output on the global agreement of major oil producers, including Russia, to limit crude production in order to prop up commodity prices. The ministry also said the industrial output sank because of the warm weather, which pressured demand for natural gas on either domestic and foreign markets. (more…)

China: Fruit and Veg Exports to Russia up 28% from Heilongjiang

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According to the Office of Statistics, the fruit and vegetable export form Heilongjiang increased greatly in 2017. The total export volume of fruit and vegetables was 72.900 MT, with a value of 35,971,200 USD. That is an increase in export volume of 28.8% in comparison with the same period in the previous year, and an increase in value of 28.41%. This is a new high point in the history of fruit and vegetable transport from Heilongjiang port to Russia.

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