Market News

Russian retail is negotiating the supplies of fruits and vegetables from Uzbekistan

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The largest Russian retail chains are negotiating the supplies of fruits and vegetables from Uzbekistan. Magnit, Auchan, 6 sotok, Essen and others showed their interest in Uzbek fruits and vegetables.

After the visit of the President of Uzbekistan to Russia and negotiations with Vladimir Putin, a number of Russian companies sent the request for Uzbek fruit and vegetables.

According to the inner source, a long-terms agreements for 5 and 15 years are being negotiated.  Uzbek companies suggest one price for the year.

Long-term agreements will allow Uzbek companies to focus on the production of the necessary volumes of exports of agricultural products and form logistics. Distributional centers for logistics, storage, processing, export will be created in 11 regions of Uzbekistan. Fruit and vegetables will be supplied there from the fields, where they will be stored in refrigerators for further shipment to export or processed into finished products.

When the sanctions are over, Uzbek companies will have some advantages, for example, Turkish companies work separately, and Uzbek companies act as a united group, although a lot is to be done.

www.fruit-inform.com

How Russians deal with the recession

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May 10, the forecast for 2016-2019, made by the Ministry of Economy, was published. The Office proposes to limit the salaries of state employees in 2016-2017. Sergei Naryshkin, State Duma Speaker, said that deputies may not support the limitation of salaries. Dmitry Peskov, spokesman of the Russian president, said that the Kremlin has no clear position on the proposals of the Ministry of Economy. How has the recession already affected the lives of Russians?

According to the research by the Institute of Social Analysis and Forecasting, for the first time in eight years Russians spent more than half of income, 50.1%, on food products.

In 2015, the real wages of Russians decreased by 9.5%, forcing them to revise their spending, as well as the budget for the vacation.

Russians also began cutting spending money on entertainment and eating out. For example, according to Nielsen study of September 2015, 49% of respondents admitted that they had not been in bars since the beginning of the year. The number of people who ear out at least once a month, has decreased by 10% on average.

According to the latest opinion poll, published on May 10, 1% of the respondents said that the situation in the country was great, 11% said it was good.

Business in crisis

British consulting company Global Counsel  published a report in late 2015 which stated that in 2016 Russia would leave many global companies. The conclusion was based on analysis of financial statements of 46 companies, including BP, Royal Dutch Shell, Deutsche Bank, Siemens, Lafarge.

The recession was the hardest for retail companies, especially in the middle segment. In 2015, many brands had to leave the Russian market, including American Eagle, River Island, Esprit, New Look, Finnish department store Stockmann, that was on the market since 1989. In 2014, the company’s losses amounted to €26 million.

Sales grew mainly in the low price segment. This is clearly seen in the fast food market: in 2015, leaders were KFC, Burger King and McDonald `s.

According to the Association of European Businesses (AEB), in 2015, sales of cars in Russia fell by 35.7% to 1.601 million vehicles. Some car brands had to leave the country, such as Opel, Honda, Seat. Chevrolet stopped selling most car models.

www.retailer.ru

Egyptian export figures to Russia

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The Egyptian export of fruit to Russia amounted to 183.59 million dollar last year. That is equal to 44 per cent of total Egyptian export to Russia. The main products were oranges, grapes and strawberries. Vegetable export amounted to 165.99 million dollars, or 40 per cent of Egyptian export to Russia. The main products were potatoes, onions, garlic and tomatoes.

Russian investments in Egypt are estimated at 62.77 million dollar. There are 408 Russian companies involved. With these figures, Russia is in 47th place of the largest investors in Egypt.

www.freshplaza.com

French parliament votes against sanctions

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French parliament debated about the extension of European sanctions against Russia. Voting indicated that a majority is opposed to the sanctions. The centre right party that requested the debate carried a motion to stop the sanctions. The French parliament only had indirect influence on the decision. European heads of government have to decide on the sanctions next month.

www.freshplaza.com

Russia lowers import tariffs

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According to Russian media, the country will lower the import tariffs for pistachios and dried fruit to a zero-tariff. At the end of May, import levies on broccoli, cauliflower and sprouts will also be lowered. Cultivation of these vegetables is difficult in the Russian climate. The main trade partners for dried fruit are Tadzhikistan, Uzbekistan, Iran, Turkey, Chile and Argentina.

www.freshplaza.com

Morocco profits from boycott

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Morocco profits the most from the Russian boycott of Turkish fruits and vegetables, according to Russian media. According to reports, the North African country is the most important supplier of tomatoes and oranges. The country supposedly has a market share of 55.6 per cent in citrus, 30.2 per cent in vegetables and 25.7 per cent specifically in tomatoes.

www.freshplaza.com

 

Fruit prices in Russia have increased almost by 60% for 2 years

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According to Rosstat prices for fruit in Russia have risen by 59.2 per cent since the boycott. Between July 2014 and March 2016, when the sanctions were imposed, fruit prices have risen by nearly 60 per cent. Prices for vegetables and frozen fish have also risen. The largest increase in prices was registered during the first months after the boycott was introduced. Prices have stabilised for now.

www.freshplaza.com

Demand for organic stagnates in Russia

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Demand for organic stagnates in Russia. While global demand for organic products is growing, demand in Russia is stagnating. The volume of organic products came to 10,800 tonnes in Russia. This is comparable with the volume of 2014. That year demand for organic products rose by 4.9 per cent. Despite the trend in healthy food, demand for organic products is stagnating.

www.freshplaza.com

Russians now spending half of their income on food

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As real incomes continue to contract in Russia amid an ongoing economic slump, spending on foodstuffs is taking up a larger and larger part of the average citizen’s budget.

In February 2016, for the first time in eight years, food and alcohol, along with tobacco products, were the main part (50.1 percent) of Russia’s retail turnover.

The statistic was published in the monthly monitoring report of the population’s social-economic situation and wellbeing prepared by the Institute of Social Analysis and Forecasts at the Russian Presidential Academy of National Economy and Public Administration.

The previous “record” was set in May 2009, when the share of food products reached 49.6 percent of retail turnover.

“Currently there is growth in the population’s spending on food, which logically reflects the fact that real income has decreased and poverty has increased. It is known that the poorer the household, the higher the part of the budget that it spends on food,” say the report’s authors.

The institute calculated that in February 2016 Russians’ real income in comparison to the same period in 2015 had declined by 6.9 percent and real salaries had declined by 2.6 percent. The poverty level by the end of 2015 had increased by 2.2 percent to 13.4 percent.

According to the monitoring report, 50 percent of the population have experienced a decrease in living standards, which has consequently resulted in a reduction of consumer activity. Both low-income and medium-income classes have begun to economize.

By March 2016 the number of poor Russians who had begun economizing on goods and services had increased to 89 percent and the number of people from the middle class who were cutting back their spending had grown to 79.3 percent.

Of the Russians surveyed, 55.8 percent said that they were ready to cut out non-essential goods they were used to buying.

“Besides buying food, Russians must make monthly payments to cover their debts, mortgages and other financial commitments. In such cases the majority of Russians either stop buying cars, expensive electronics, furniture, etc., or don’t buy them at all,” said Natalya Kolupayeva, a senior analyst at Raiffeisen Bank.

According to the report by the Institute of Social Analysis and Forecasts, people are mostly pessimistic in their evaluation of the economic situation: “The light at the end of the tunnel is moving farther away.”

In the words of one of the report’s authors, Maria Ivanova, in the course of the year the share of Russians’ budgets occupied by food products may increase.

“The reasons will be the same: The continuing reduction of the population’s real income and consequently, priority consumption of essential goods,” she said.

www.rbth.com