Market News

Proposition for zero import duties for Iranian products exported to Russia

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Russia hopes to increase imports of fruit and vegetables from Iran. In order to make this happen, the country is considering reducing or eliminating import duties on Iranian agricultural products. Iran has become a more important partner for Russia following the ban on Turkish agricultural products, which will come into force 1 January 2016.

Minister of Economic Development Alexei Ulyukayev told reporters that the final decision on this issue must be taken by the Eurasian Economic Union.

“We are proposing serious steps to improve trade conditions for Iranians, meaning the reduction or, in some cases, even elimination, of import tariffs, primarily for agricultural produce — fruits and vegetables,”.

www.freshplaza.com

Armenian exports growing

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According to the Armenian Ministry of Agriculture, the country exported 70,200 tonnes of fruit and vegetables already this year. That’s 28,000 tonnes or 68 percent more than last year. The export is only expected to grow further. The majority of the export, 84 percent (58,900 tonnes), is exported to Russia. About 11,000 tonnes went to Georgia, with other markets being countries like the United Arab Emirates, Poland, Kuwait, Czech Republic, Kazakhstan, Belarus and Iran.

Armenia exported 11,000 tonnes of grapes, 21,300 tonnes of apricots, 3,045 tonnes of plums and 2,200 tonnes of cherries. The apple export amounted to 1270 tonnes. For cabbage it’s 10,200 tonnes, radish 2,900 tonnes, tomatoes 1,280 tonnes and cucumbers 3,700 tonnes. For all products, a significant growth was realized.

www.freshplaza.com

Real wages and retail sales falling, while unemployment rate rising

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Retail sales fell 13.1% year over year, worse than the 11.5% market estimates. The decline likely means consumption declined in the fourth quarter.

“This will cause the recession to be extended for at least a sixth quarter,” says Daniel Hewitt, a Russia economist with Barclays Capital in London.

Real wages fell 9.0%, but that’s better than the 11% decline in October. Unemployment on the other hand rose to 5.8% from 5.5% in October, so within any margin of error.

Russian industrial is still negative, falling 3.5% on the year. Consensus estimates had it at -2.9%. The good news is that the negative numbers are not as high as they were a few months ago. They’ve been on the upswing for the past six months, but are still in the red.

www.forbes.com

Russia’s Central Bank declares shortage of banned food items

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Russian food producers failed to meet market requirements in most categories, according to a report published on Friday by the Central Bank, the Kommersant newspaper reported.

In the report, the Central Bank sums up the results of an “import substitution” agenda that was introduced because of the restrictions on food imports from the United States, the European Union, Canada, Norway and Australia.

Imposed last August in retaliation for the Western sanctions, the import restrictions have boosted Russian food industry — the report revealed growth in meat and dairy production, with a significant 25 percent increase of beef and potato output. Fish and sausage production suffered a small decline, falling by 5 and 4 percent respectively.

However, the Central Bank said that the development of domestic food industry so far has failed to fill the gap left by the embargo, Kommersant reported. Total volumes of beef decreased by 42%, butter – by 15%, fresh and chilled fish – by 14%, vegetables – by 10%. Only poultry, pork and potatoes showed the increase  – 6%, 7% and 19% respectively.

“Although the percentage of Russian products has increased, the total market volume that includes both domestic and imported products, has decreased,” the report says.

The shortages have led to soaring food prices with prices of key products rising sharply — cereals and beans prices showed the biggest increase (49.2%), a government analytical center revealed in a “Food Embargo” bulletin published this August.

www.themoscowtimes.com, www.kommersant.ru

Russia tightening controls on imports from Belarus

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Starting from 7 December, Russia tightened its sanitary controls on agricultural and food products imported into its territory from Belarus, as reported by Sergei Dankwert, head of the Federal Service for Veterinary and Phytosanitary Supervision.

He also announced that Belarusian food companies re-exporting to Russia will be required to produce the original phytosanitary inspection certificates on the basis of which they issued a permit allowing the product to enter the markets of the Eurasian Economic Union, including Russia.

www.freshplaza.com

Possible shortages of citrus and tomatoes because of anti-Turkey sanctions

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Russian Economic Development Minister Alexei Ulyukayev has warned that the introduction of sanctions against Turkey may lead to “short-term disruptions” in the supply of fruit and vegetables, according to the RIA Novosti agency.

“We need some time; it is not possible to rule out some [supply] failures in the short run. However, we think that the situation is, on the whole, completely manageable,” Ulyukayev was quoted as saying.

He added that tomatoes and citrus fruit were most likely to be affected, due to the “very substantial share of Turkish exports” in these markets.

Ulyukayev also said that it was possible to secure adequate supplies from other countries; however, some shortages might occur before all relevant contracts were signed and sanitary control over the imported produce established.

A range of Turkish imports will be banned from entering Russia starting from Jan. 1, 2016. According to RIA Novosti, these currently include parts of animal carcasses, chicken and turkey offal, fresh and chilled tomatoes, onions and shallots, cauliflower and cabbage, broccoli, cucumbers and gherkins, fresh and dried oranges and tangerines, grapes, apples, pears, apricots, peaches and nectarines, plums and sloes, and strawberries.

Tensions flared up between Ankara and Moscow after a Russian Su-24 bomber was shot down by Turkish forces on Nov. 24, with Turkey claiming the jet had previously violated its airspace — an accusation Russia denies.

www.themoscowtimes.com

Russia to impose food ban in new sanctions against Turkey

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Russia will restrict imports of Turkish fruit and vegetables as part of a package of new sanctions following the downing of a Russian warplane by Turkey last week.

Deputy Prime Minister Arkady Dvorkovich said Monday that the produce ban could be deferred for “several weeks” to allow Russian firms to find new suppliers and curb price rises, according to state news agency RIA Novosti.

Russia has previously banned food imports from the European Union and United States over the Ukraine crisis, a measure which has been blamed for fueling price rises of food on the Russian market.

The new measures against Turkey announced at a meeting chaired by Prime Minister Dmitry Medvedev also include limits on Turkish construction firms’ ability to sign new contracts in Russia and restrictions on road transport.

www.businessinsider.com

Fall in Russian fruit and veg imports from China

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In the first seven months of this year, Russia imported a total of 398.9 thousand tonnes of fruit and vegetables from China; a lower volume than the 417.4 thousand tonnes of the same period last year, but higher than the 391.8 thousand tonnes recorded two years ago, reports FAMMU/FAPA with data from Factsheet Russia.

From this it can be concluded that China has not observed a clear change in its volume of exports to Russia after the introduction of the embargo to EU imports.

In 2014, Chinese fruit and vegetable exports to Russia amounted to 706.7 thousand tonnes, compared to 654.7 thousand tonnes a year earlier. Of the nearly 399 thousand tonnes imported by Russian in 2015, about 100.2 thousand tonnes corresponded to fruit and the remaining 298.7 thousand tonnes to vegetables.

The most exported products were onions, with more than 69 thousand tonnes, tomatoes, with almost 66 thousand tonnes and cabbage, with 53.9 thousand tonnes. Shipments also included about 47.6 thousand tonnes of apples, 34.7 thousand tonnes of carrots, 22.7 thousand tonnes of garlic and 18.4 thousand tonnes of peppers.

www.freshplaza.com

Russia declares the recession has ended despite continuing low oil prices and sanctions

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Despite continuing low global oil prices and Western economic sanctions, Russia’s recession has ended, the country’s economic minister said Monday. The announcement implied third-quarter growth in Russia, but Economic Minister Alexei Ulyukaev provided no figures to support his statement.

“According to formal indicators the recession in the Russian economy has finished,” Ulyukaev said.

Russia’s economy has been battered since harsh economic sanctions were applied by the U.S. and European Union over the annexation of Crimea from Ukraine in March 2014. Low global oil prices down from their high of over $100 a barrel over a year ago have also hit Russia’s economy hard.

Ulyukaev said Russia could experience as much as a 3.9 percent economic decline in 2015. The World Bank’s low-range forecast for 2015 predicts a 4.3 percent economic contraction for Russia with a continued contraction in 2016 at 2.8 percent. The World Bank estimates the country’s gross domestic product will stop falling in 2017. Even the World Bank’s revised baseline forecast for 2016 shows a 0.6 percent decrease with an economic recovery not taking place until 2017.

“We see that the low point was reached in June, and from July, if we are talking about month-on-month dynamics taking seasonality into account, we see a small positive rise — 0.1 percent in August from July, 0.3 percent in September and 0.1 percent in October,” Ulyukaev said describing the country’s GDP, Reuters reported.

Russia’s GDP fell by 3.6 percent in October, an improvement from 3.8 percent in September, AFP reported. The country’s poverty rate has climbed and now numbers 21.7 million people.

Ulyukaev’s statement comes as other experts and officials make critical evaluations of the Russian government’s economic policies.

“We have for the first time since early 2000 seen the decline in real incomes,” said former Finance Minister Alexei Kudrin Saturday, according to Russia’s state-run Tass news agency. “In my opinion, government measures to support the economy of the population are not enough.”

Two consecutive quarters of negative growth led to the official recession label. Russia has experienced a recession since last year, with the country’s currency losing value and inflation rising.

www.ibtimes.com

Russia bans food imports from Ukraine

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Moscow will impose a food embargo on Ukraine starting from 1 January 2016, when the economic part of Kiev’s European Association Agreement comes into force, according to Russia’s Economic Development Minister Aleksey Ulyukaev.

“Since Ukraine joined economic and financial sanctions against the Russian Federation, we have decided to introduce protective measures by imposing a food embargo,” said the minister.

The measure is expected to protect the Russian market from the illegal supply of embargoed European goods that will become available in Ukraine under the Association Agreement with the EU.

“There’s a high probability we will have to unilaterally protect our market from uncontrolled imports of goods from third parties through the customs territory of Ukraine, primarily from the European Union,” said Ulyukaev.

Moscow introduced a one-year ban on agricultural produce, food and raw materials from countries that joined sanctions against Russia. This includes many EU countries.

Ulyukaev added the Kremlin plans to introduce customs tariffs on import of other goods from Ukraine. The tariffs will be introduced because Ukraine will no longer be part of the Commonwealth of Independent States (CIS) free trade zone and should not, therefore, enjoy membership benefits.

Ukraine will lose $600 million in exports in 2016 because of the Russian embargo, said Ukrainian Prime Minister Arseny Yatsenyuk. He stressed that Moscow’s actions are illegal and are “another manifestation of the economic aggression” towards Kiev.

Russia and Ukraine are currently trading in accordance with the free trade agreement between the CIS countries. Moscow said this fall that Kiev could lose both the tariff-free preference and food exports to Russia.

Ulyukaev has said that Russia has no plans for further sanctions against the EU if the situation doesn’t deteriorate.

www.rt.com