Market News

Over 1,000 tonnes of sanctioned produce denied entry into Russia

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According to an official press release of Russia’s Federal Customs Service, inspectors of Russia’s Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor) and the Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing (Rospotrebnadzor) together with customs workers collected more than 1,000 tonnes of contraband.

From September 2014 to September of this year, 404,8 tonnes of contraband food were destroyed in Russia, while inspectors had returned an additional 777 tonnes to Belarus and Kazakhstan.

Two hundred thirty six vendors received notices for cases initiated against them for administrative violations. The total amount of fines for these infractions is 4.1 million rubles.

www.fruitnews.info

Russia doesn’t spend less on import

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Russian research sheds new light on the import substitution the Kremlin is focusing on and which partly forms the basis for the boycott, but it seems to have trouble taking off. The study divides the import by commodity and value. Import substitution of value means less is spent on import, and more on domestic production. For commodity, this means the import isn’t replaced if less is imported, while the market is also shrinking.

According to statistics, the import went down by 27 percent between January and August, and consumption in those months went down by ten percent. In the wake of the rising food prices, researchers saw that the imported products were replaced by domestic produce.

The import share in retail also decreased significantly, but in terms of value the import in August surpassed the import value of a year earlier. This suggests that households spend the same amount on imported products, but they are buying lower numbers.

www.freshplaza.com

Armenian production and export on the rise

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The Armenian fruit and vegetable sector has seen significant growth this year, both in production and in export, figures from the Ministry of Agriculture show. The export amounted to 4600 tonnes of tomatoes and cucumbers. A year before, the export was still 370 tonnes. In addition, 9400 tonnes of cabbage have reportedly been exported between January and October, 2015. The total volume amounted to 64,800, last year it was 38,550 tonnes, a 34 percent increase.

The export to Russia doubled, partly thanks to the boycott. Russia bought 61,000 tonnes of fruit and vegetables, compared to 36,000 tonnes a year earlier. Russia is by far the biggest market for Armenian products. The country also export a lot to Georgia, Kazakhstan and Belarus.

The good harvest also improved export opportunities, because more volume was available. According to statistics, agriculture is the fastest growing sector within the Armenian economy. Between January and September, agriculture is said to have increased by eleven percent already.

www.freshplaza.com

Apple cultivation in former Soviet Union up

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The apple production in CIS countries (former Soviet republics) has increased in recent years. Russia is still number one, and is also the fastest grower, according to official statistics. In the past five years, production is said to have increased by 45 percent. For other countries, the growth figures turned out lower: Ukraine +25%, Uzbekistan +35%, and the smallest grower Azerbaijan +15%. This year, the countries together are expected to harvest 5.5 million tonnes of apples, an increase of 60 percent over five years.

www.freshplaza.com

Armenia doubled export volumes to Russia

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The embargo imposed on EU exports has boosted interest for Armenian products in Russia. This year, a huge increase has been registered in the export of fruits and vegetables just to that market.

In the period between January and the end of September this year, the volume of fruit and vegetable shipments from Armenia has doubled compared to the same period last year. In total, during these nine months, the country exported 61.0 thousand tonnes of fresh horticultural products, compared to the 36.0 thousand tonnes shipped in the same period of 2014.

About 84 percent of Armenia’s total fruit and vegetable exports this year have gone to Russia, with the biggest increase being recorded for grapes. In addition to Russia, Armenian products have also hit the Georgian, Kazakh and Belarusian markets.

www.freshplaza.com

Russians cut spending on restaurants and night clubs

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Russians are cutting back on visits to bars, restaurants and nightclubs as the price of food and alcohol rises amid a recession.

A survey by consumer research firm Nielsen published Friday found that almost half of respondents were spending less money on going out. Russians have seen the value of their wages fall sharply thanks to double-digit inflation over the past year.

The survey, which polled 1,000 people across Russia last month, said 49 percent of respondents had not been to a bar once this year, up from 28 percent last year, and 46 percent had not been to a pub, compared to 32 percent percent in 2014.

Sixty-two percent of respondents had not visited a nightclub this year, up from 45 percent last year.

Restaurant and cafe visits also fell, the survey found, and diners have begun ordering less wine and fewer desserts.

Respondents said they were cutting back due to a lack of money and the increasing cost of food and drink. Prices began rising last year, thanks to embargoes on a range of foods from the United States, the European Union and some other countries, and a sharp weakening of the ruble, which has made imports more expensive. Food prices were, on average, 17.4 percent higher in September 2015 than the year before, according to official statistics.

Wages, meanwhile, have risen more slowly, and the economy is in recession.

“Visiting restaurants and bars has become a highly expensive activity,” Nielsen’s head of consumer surveys, Yekaterina Petrova, was quoted as saying in a press release. “Many people are saying that they have stopped going out unless there is a reason to.”

www.themoscowtimes.com

Russian fruit prices increase further

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On average, fruit has become 30 to 50 percent more expensive in the past 12 months. The cause is a weak rouble and the boycott of Europe.

Оranges show the biggest price hike. In September, prices were 57.4 percent higher than a year before. Bananas, apples and pears became a third more expensive on average. Import has become a lot more expensive since the rouble lost 45 percent of its value. According to statistics, 90 percent of the consumed fruit in Russia is imported. Prices for food in general increased by about 17.4 percent on average.

Retail sales going down

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In September, the turnover of retail trade in Russia fell down by 10.4% to 2.3 trillion rubles, according to the Russian Federal Statistics Service (Rosstat). This is the maximum decline in the past 15 years. In the first nine months of 2015, this figure decreased by 8.5% to 19.9 trillion rubles.

The previous record was registered by Rosstat in April this year, when the decline was 9.6%.

In monthly terms, retail sales in September decreased by 3%, that is the first decline since April 2015. In April, sales declined 2.6%, in May, they increased by 2.4%, in June – by 0.2%, in July – by 3.3%.

www.retailer.ru

Russian tycoon invests in apples and potatoes

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Russian electricity and farming tycoon Dmitry Arzhanov has told the Reuters Russia Investment Summit that he plans to invest in apple and potato production, a direct response to Moscow’s embargo on food imports from Europe, the US, Canada and Australia.

The ban, which was introduced in August 2014 in retaliation against EU sanctions that were imposed following the conflict in Ukraine, has apparently led to new opportunities for domestic producers, but few have been able to capitalise as prices rise for items including fresh produce sold in the Russian market.

Arzhanov’s company AFG National, which has traditionally concentrated on producing rice and grain, is now planning to establish 300ha of apple orchards by 2016.

In seven years time, Arzhanov reportedly told the summit, around 2,500 ha will be under cultivation, producing an estimated 125,000 tonnes.

That figure represents around 10 per cent of the volume of apples that were imported from Poland prior to the ban.

Elsewhere, AFG National is said to be lining up a US $600m investment package to create what Reuters referred to as “a vegetable complex” that can produce 500,000 tonnes of washed potatoes per annum – equating to a quarter of Russian market demand – within the next five years.

“Russia’s government, faced with economic sanctions and the worst crisis in its relations with the West since the Cold War, has pushed the concept of ‘import substitution’ – domestic firms stepping in to fill the gap left by imports,” the Reuters report continued.

“That has worked in some sectors, but food producers, for years sidelined by powerful foreign competitors, have struggled to increase production quickly, people in the industry say.”

Arzhanov, who also co-owns the retail electricity supplier TNS Energo Group, said his investments in both apples and potatoes would be safe regardless of whether or not the embargo was lifted in the near future.

He also predicted that an extended ban lasting for the next two years would result in a downturn in investment within the Polish apple industry.

www.fruitnet.com

IMF downgrades 2015 economic forecast on Russia to minus 3.8% of GDP

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The International Monetary Fund (IMF) downgraded its economic forecast for Russia as it projects recession of 3.8% in GDP for 2015 and of 0.6% for 2016 in its new analytical research prepared to annual meeting, TASS correspondent reports with reference to informed sources.

In end-June, IMF experts forecasted recession of 3.4% for 2015 and 0.2% growth for 2016 while in April the organization also projected the Russian economy will decline by 3.8% this year.

The downgrade is largely due to recent falls in oil prices on the global markets.

The IMF also expects inflation to reach 15.8% in Russia this year and 8.6% – in 2016.

All in all, the fund’s projections are in line with those given by the Russian authorities. The Central Bank said on September 11, it expects recession in Russian to stand at 3.9-4.4% of GDP this year and at 0.5-1.0% of GDP next year. Earlier the Economic Development Ministry slightly downgraded its projection on GDP decline for 2015 – to 3.6% from 3.3%.

The new report will be officially presented by the International Monetary Fund on October 6.

www.in.rbth.com