Market News

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.

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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.

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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.

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SHAFFE Expects Difficult Conditions for Fresh fruit Exports to Russia and Ukraine

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The Southern Hemisphere Association of Fresh Fruit Exporters (SHAFFE) has reviewed the Russian and the Ukrainian fresh fruit import markets and expects increasingly difficult conditions to maintain supply to both markets.

In 2020, Ukraine imported 795 million USD of fresh fruit with over 48% originating from suppliers like Turkey (citrus), Ecuador, and Costa Rica (bananas and pineapples). Total exports of fresh fruit from SHAFFE member countries (*) reached USD$54 million in 2020, representing 7% of the total fruit imports market in Ukraine. The main suppliers to Ukraine from SHAFFE member countries included South Africa, which exported mainly citrus with a value of USD$16 million and which represented 30% of the total value of exports registered by SHAFFE member countries in 2020.

In 2020, exports of fresh fruit from SHAFFE member countries to Russia reached 643.084 tons, which represented 17% of the total fresh produce import market During the same period, the main species of fruits exported by SHAFFE member countries to Russia included apples, pears, and citrus, which together represented 80% of the total exports of SHAFFE member countries to this market. The exports of fresh produce from SHAFFE member countries have been on an upward trend, registering a 29% volume growth, between the period 2017 to 2020. South Africa and Argentina are the main suppliers of fresh produce to Russia and represent 69% of the total volume exported by SHAFFE member countries in 2020.

According to SHAFFE, foreseeable negative impacts could include reduced exports to the Russian and Ukrainian markets and hence the redirection and oversupply of citrus, apples, and pears to other destinations such as the EU, U.S.A., or others. This could lead to an oversupply of those markets with resultant financial losses for exporters. Additionally, the entity foresees that this situation could compound even further the negative impact of the current rise of production and logistical costs facing the Southern Hemisphere exporters and growers. Sanctions by some Western countries against Russian banks as well as SWIFT payments will lead to add to the risks faced by exporters. It is hoped that the situation will be resolved soon.

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Russia Allowed Apple and Pear Imports from China

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Rosselkhoznadzor has allowed Chinese importers to again supply fresh apples and pears to the Russian market from February 20, 2022. This is good news for China and for Russian consumers, who are now paying a very high price for Russia’s voluntary self-isolation from global markets.

However, industry sources say it is bad news for Moldova, which now has a major competitor in the Russian market. Andriy Yarmak, an economist at the Investment Centre of the Food and Agriculture Organization of the United Nations: “China is the world’s largest exporter of apples and has remained at the top of the global ranking of exporters, despite the ban on the supply of products to the Russian market. China exports about 1 million tons of fresh apples to many countries around the world annually.”

“The main advantage of Chinese apples is their low price. Therefore, they are mainly purchased for a low price segment, while China imports premium-quality apples from countries such as New Zealand, the USA, Chile, South Africa, and France.”

east-fruit.com

Chilean Cherry Exports are Expected to Increase by 9.8% to 387,268 mt

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According to the ASOEX Cherry Committee, which represents more than 82% of the volume of Chilean cherry exports to the world, Chile will export 77,453,626 boxes of cherries (5 kilos) or 387,268 tons of cherries this season, i.e. 9.8% more than in the previous season.

It should be noted that the current season is already underway. According to data from ASOEX, to date, Chile has exported 44,162 boxes of cherries.

“We have started a new cherry export season. We have prepared ourselves to deliver a high-quality healthy product to our consumers around the world. We have worked, together with the authorities of the Ministry of Agriculture and the SAG, to have a very good season. In addition, we are working to diversify our cherry exports. China will remain as the main destination for our fruits but we are projecting a significant increase in other markets. Thus, we expect China’s share will decrease from 91% to 87%,” stated Ronald Bown, the president of ASOEX.

“In general, we have had good weather conditions. We have not been affected by rain or frost, so we think our fruit will have good quality. The committee has worked, very conscientiously, on different recommendations to continue safeguarding and improving our fruit’s quality and safety. In addition, given the complicated logistics outlook in the world, we are working closely together as an industry to have a very good season,” stated Cristian Tagle, the Chairman of the ASOEX Cherry Committee.

“We have defined, together with the Cherry Committee and ProChile, a promotional campaign that accompanies this growth in cherry volumes and encourages greater consumption of the fruit. We will develop a mix of marketing actions, especially in China, as it is our main market, but this season we will also implement promotional campaigns in eight other markets: the US, South Korea, Vietnam, Thailand, India, Russia, Canada, and Taiwan,” stated Ignacio Caballero, ASOEX Marketing Director.

 

We invite you to the webinar “Import of Cherries from Chile to Russia 2021. Questions and Answers”. The webinar will take place on December 14, 2021, at 11.00 (GMT + 3). Sharif Christian Carvajal, Marketing Director for Europe, Asia and the Middle East of the Chilean Association of Fruit Exporters (ASOEX), more will tell in detail about the current cherry season in Chile, as well as the plans of the Association to promote the Chilean cherry in Russia. During the webinar, participants will be able to ask questions to the speaker.

You can register to the webinar here.

The webinar is organized by the ASOEX.

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Webinar “Import of Cherries from Chile to Russia 2021. Questions and Answers”

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During the webinar, Sharif Christian Carvajal, Marketing Director for Europe, Asia and the Middle East of the Chilean Association of Fruit Exporters (ASOEX), told about the current cherry season in Chile, as well as the plans of the Association to promote the Chilean cherry in Russia. During the webinar, participants will be able to ask questions to the speaker.

Speakers:

  • Sharif Christian Carvajal
    Chilean Association of Fruit Exporters (ASOEX). Marketing Director Europe, Asia and the Middle East
  • Ksenia Gorovaya
    Director of the consulting agency Crisp Consulting

The webinar was organized by the Chilean Association of Fruit Exporters (ASOEX).

Russian Inflation Jumps to 8.1%

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Inflation in Russia climbed to its highest level in almost six years in October as the government and Central Bank struggle to rein in rapid price rises which threaten to undermine economic recovery.

Inflation hit 8.1% last month, the Rosstat national statistics service said Wednesday — the fastest rate of price increases since February 2016, and more than double the Central Bank’s 4% target. That was up from a reading of 7.4% a month earlier and ahead of market expectations.

The higher prices come as policymakers around the world face the prospect of so-called “stagflation” — high inflation and sluggish growth — as the global economy continues to emerge from the coronavirus. In the U.S., inflation is currently running at a 13-year high amid major supply chain bottlenecks.

Russia’s Central Bank chief Elvira Nabiullina has for months sounded the alarm over global price rises, putting herself at odds with western policymakers earlier this year by warning them the uptick in inflation was not just a transitory phenomenon.

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Georgian Fresh Potato Exports at Record High in October

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After an unusually high level of fresh potato exports from Georgia in September 2021, they increased even more in October. According to the official trade data of the Ministry of Finance of Georgia, Georgia exported 9,700 tons of potatoes in October 2021, which is 90% more than October exports over the last seven years combined. Russia remained the key destination with an 81% share in export volumes. The export price on FOB terms for the Russian market was $420 per ton, which is the highest price among the countries importing potatoes from Georgia in October.

Due to the unprecedented demand on the Russian market in September and October 2021, the export of Georgian fresh potatoes amounted to 16,000 tons. This is three times more than the total exports for these months of 2014-2020.

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Pea Processing Attracted Record-Breaking Investments

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Pea processing has attracted record-breaking investments in Russia. They are promising a broad range of new high-value raw materials to the feed industry. Russia has the world’s second-largest pea industry after Canada, and production volumes are still growing.

Pea production climbed to 2.74 million mt in 2020, compared to 2.37 million mt in 2019 and 2.3 million mt in 2018. Russia exports nearly 1 million tons of peas per year, while the rest is used by the Russian food industry.

Several Russian companies have recently laid out plans to begin high-level pea processing in Russia in the next few years. Moscow-based company Pineco expects to begin building a pea processing plant in the next two months, the state development corporation of Orel Oblast said in a statement on July 18.

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