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X5 Retail Group announces the launch of the first three stores “Pyaterochka” in the Volgograd region. By the end of 2014, the retailer plans to launch ten more “Pyatorochka” in Volgograd.

X5 Retail Group launched a distribution center with an area of 30,200 sq. m in the Rostov region. It will cover stores in Volgograd, Rostov and Saratov regions, Krasnodar and Stavropol regions. As of 30 June 2014, the network “Pyaterochka” numbered 4,128 supermarkets.

Finnish Corporation SOK opened the 18th store Prisma in St. Petersburg. Sales area of the new supermarket is more than 2,000 sq. m. The investments in the project totaled € 5,000,000. In October, the company is going to open one more hypermarket in St. Petersburg.

French retailer Leroy Merlin, specializing in the sale of goods for the construction and repair, launched its second hypermarket in Novosibirsk. In the spring 2014 Vincent Jeanty, CEO of the network in Russia, said that over the next three years the company would increase the number of stores in Russia almost in three times – from 28 to 80.

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Russia will not allow the import of prepaid products

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Russia will not revise its decision on the ban of the import of prepaid food products. PM Dmitry Medvedev said that in an interview to “Russia 24” on September 21.

Prime Minister called all the losses incurred in this case force majeure.

“That is a force majeure, which exists in any state. The question is closed, we are not going to revise it” – said Medvedev.

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Argentina: Exports to Russia will amount to 2 billion dollars in 2015

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The Minister of Industry, Debora Giorgi, will returns to Argentina after closing this week’s trade mission to Russia, which involved more than one hundred Argentine companies.

“We are pleased with the performance of Argentine companies in the World Food Moscow fair,” the official said in a conversation with Radio Del Plata on Wednesday. She also said that shipments from the poultry industry, the producers of fine fruits and of dairy products were already arriving to Russia.

The ban imposed by the government of Vladimir Putin on the food products of the countries that opposed Russia in the conflict in Ukraine created an opportunity for Latin American producers.

Argentina also achieved negotiated the remaining harvest of pears and apples to Russia, a product that might have been sold at a lower value to another destiny if it wasn’t exported to that country, the minister said.

According to industry estimates, the ban creates the opportunity of exporting products to Russia for $750 million dollars, apart from the other $900 million dollars of products not covered by the ban, such as wine, bread or adds oils.

“Shipments of poultry, apples, and other products have already started to arrive. Businesses with Russia are already in place, and we need to sign longer-term contracts,” said Giorgi. Additionally, Russia’s third biggest importer of high quality fruits and vegetables plans to open an office in Buenos Aires to stock up on berries, cherries and other products. “It will be open before the end of the year,” Giorgi stated.

In 2003, Argentine exported USD $200 million to Russia. This year’s exports will amount to 900 million. “We will double that amount next year because we export perishable goods and are out of stock, but we will have new crops next year. Thinking we will achieve exporting $1.8 or $2 billion dollars is conservative,” said the Minister.

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Rouble reaches new low

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The Western sanctions appear to be having more and more effects on the Russian economy. The value of the rouble reached a low point compared to the dollar on Monday. On Monday, the rouble reached a new low compared to the dollar: 38 to 1, which is 1.3% lower. The Russian government is planning to close more trade deals in roubles, in order to limit dependency on the dollar in global trade. Investors favour more stable currencies.

In addition, Central Asian countries seem to have reacted with a bit too much enthusiasm to the Russian boycott. Many countries announced to significantly increase export, but reality turns out to be more complicated. The countries are unable to increase export on such short notice. Besides, experts warn that the proclaimed boycott will remain in effect for a year; a relatively short period. The question also remains whether these countries are able to increase domestic production on short notice. Also, growing exports also put more pressure on the domestic market, which could cause prices to go up there. Within the Central Asian countries, criticism can also be heard. Expanding the agricultural sector requires time, and there’s doubt whether exporters will give up their relations for a year of export to Russia. And then there’s the low quality of produce, do Russians actually want that? Finally, some of these countries don’t produce enough to meet domestic demand, and are importing from countries like Pakistan and Afghanistan.

Israeli minister Shamir remains optimistic about the chances given to the country by the boycott. According to the minister, the country is able to supply techniques as well as products, to build up domestic cultivation.

Russia is on the lookout for new suppliers of the banned products, and Israel is looking for new markets. That Israel can profit from the boycott has been known for a while, but the statements from Israel minister Yair Shamir in Russian media are interesting. He called the boycott a big opportunity for Israel. The minister also expects trade between the countries to continue after the boycott, “it’s cheaper, more stable and there’s no political price tag attached.” Israel also won’t answer to any European requests to support the sanctions. “Remember that the EU imposed sanctions on us recently. They boycott us, and then want us not to help someone else? They can’t do that.” Israel has more to offer to the Russians than produce alone, by the way. The country is also willing to supply knowledge, and to help the Russians set up production lines in order to become self-sufficient

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By 2015, Armenia is going to export about 100,000–200,000 tones of produce

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A representative of the Union of Domestic Goods Manufacturers of Armenia, Vazgen Safaryan, announced that by the year 2015, Armenia plans to ship approximately 100,000 – 200,000 tones of agricultural products to Russia, adding that this year’s total volume of exports is reaching 64,000 – 65,000 tones.

To achieve this overall growth of domestic production and intensifying the country’s shipments, Armenia’s authorities intend to allocate additional investments in the greenhouse business, the creation of free economic zones in border villages, subsidize agricultural loans by the state, establish an agricultural equipment and tractor parks, and reduce the tax burden for manufacturers.

The monetary value of Armenian exports to the Russian market next year could reach $70 million – $80 million.

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LENTA opens sixteenth supermarket in Moscow

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LENTA, one of the largest retail chains in Russia, announces the opening of the sixteenth supermarket in the Moscow region. New supermarket opened in Moscow at the address: 2A Guryanova Street.
Total area of the store is 1857 sq.m, 50% of which occupied by retail space. Supermarket is open 7 days a week from 8am to 11pm. The stock of goods available at the shop exceeds 6500 items. Along with the wide production range of federal brands, products from local manufacturers are offered to the customers.
For visitors’ convenience, there is a parking area for 70 cars, and the trading ground is equipped with 10 cashier desks.

With the opening of this new hypermarket, the network LENTA includes 87 hypermarkets in 50 cities of Russia and 16 supermarkets in the Moscow region.

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Viet Nam boosting seafood exports to Russia

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According to General Customs, in the first seven months of 2014, Viet Nam seafood exports to Russia reached $36.2 million, up 5.4 per cent year on year. Viet Nam seafood exports to Russia are forecast to increase more sharply in the second half, thanks to Russia’s lifting suspension on seafood imports of seven Viet Nam companies and FTAs with the Customs Union, reports VASEP.

Seafood exports to Russia increased by 150 per cent in January and then Russia banned imports of pangasius from Viet Nam, exports to this market started to be down. In March, seafood exports to Russia decreased by 22-28 per cent compared to the same period last year.

It is noticed that in 2013, pangasius accounted for 44 per cent of total Vietnamese seafood exports to Russia while in the first six months of this year, this was only 11 per cent.

In June 2014, Ministry of Agriculture and Rural Development sent a delegation to Russia to solve technical problems, resuming pangasius exports to Russia, to promote cooperation in food safety control and disease control on animals as well as animal-derived products. The two countries agreed to review and update the information in exchange information on food safety, disease of aquaculture and terrestrial animals.

As a result, in early August, Russia lifted the suspension on seafood imported from Viet Nam for seven companies, of which five with pangasius products and two with frozen shrimp.

In 2013, total value of imports and exports between Viet Nam and Russia reached $2.76 billion, up 12.6 per cent year on year. Viet Nam exports were $1.9 billion, up 17.7 per cent. In particular, exported seafood products reached $105 million, up 4.5 per cent.

Accordingly, Viet Nam will be the first Southeast Asian nation to sign FTA with Customs Union. The Agreement would be signed in late 2014 and early 2015. This would bring great exporting opportunities to Russia for Vietnam enterprises.

The seventh negotiating session scheduled to take place in September 2014 in St Petersburg. This will be a chance for Viet Nam to push Russia to strengthen cooperation to ensure food safety for agricultural products, to increase the number of Viet Nam seafood exporters allowed to join this market, and to regulate microorganism limit in aquatic products.

Russian banned seafood imports from the United States, the EU, Norway, Canada and Australia within one year from date of 7 August 2014 because of political issues related to Ukraine.

Products from other countries would be considered as substitutes. Norway, with the salmon products, is by far the largest seafood supplier to Russia, accounted for 36-41 per cent of the market in the past five years. The United States, accounted for 2.5 per cent market share, offers mostly roes, cod and other frozen fish. Most EU imports to Russia are mackerel, sardines, salmon and other fish types.

This will be a good opportunity for Viet Nam and other countries to boost seafood exports to Russia. Viet Nam pangasius may have the opportunity to return to the Russian market, replacing the white fish products limited due to Russian ban on 7 August.

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Prices for apples are growing for the first time in 4 years

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The average price for apples in Russia is increasing for the first time in the last 4 seasons.

In 2010, the prices for apples in Russia became decreasing, especially in 2012 after the country became a member of the WTO. In the season 2010/11 the average wholesale price for apples in Russia was $1.43/kg. In the season 2012/13 the price decreased by 25%, and in 2013/14 it was $0.89/kg.

The main reason for the decline of prices was imported apples, duties on which Russia constantly reduced in accordance with WTO requirements. Half of the total imports accounted for Poland. Domestic production did not influence prices a lot, as the total market share of the local apples in Russia did not exceed 20%.

The reason of price growth is the Russia’s ban on apples from the EU and Moldova. Analysts say that the price growth will depend on the possibility of re-export of Moldovan and Polish apples to Russia through the countries, which are not subject to the ban.

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Supplies of apples from China and Serbia may increase

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China and Serbia can become the biggest apples suppliers to Russia this season. According to analysts, Russia imports up to 35% of apples from Serbia, the share of China is about 33%. The large volume of imports is also expected from Belarus, but it will be mainly European re-exported apples and apples from Moldova.

In the 2013/14 Russia imported almost half of the apple from Poland, meanwhile the share of Serbia and China accounted for 9 and 8% respectively.

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Consequences of the Russian ban in figures

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The figures available on the damage caused by the Russian ban differ greatly depending on the source. The real extent is difficult to calculate, but based on the figures of previous years it is possible to have a general picture of European exports to Russia. Freshfel Europe calculated the export volumes and prices on the basis of the Eurostat/Comtrade database. Today, part 1: an overview of European exports.

The total exports from the EU to Russia have grown significantly since 2011. In 2011, the EU exported 1,952,640 tonnes of fruits and vegetables to Russia worth 1.5 billion Euro. Two years later, in 2013, exports increased to 2.3 million tonnes worth nearly 1.9 billion Euro, which gives Russia more than a third of the total value of the EU’s exports. These figures do not show that the Russians pursue an independent position from the West.

Russia imports a lot of apples, which are hugely popular. In 2013, the EU shipped 1,790,448 tonnes to Russia; a higher volume than in 2012. The second most important product are tomatoes, of which 210,838 tonnes were exported, followed by pears (192,915 tonnes) and peaches and nectarines (166,991 tonnes). While tomato and apple exports increased, pear, peach and nectarine shipments dropped compared to 2012.

In terms of revenue, the same products stand on top. Apples generated nearly $ 482 million dollars for Europe, and tomatoes yielded 292 million. For pears and peaches and nectarines, revenue stood at 224 and 245 million respectively. Only tomatoes generated more money for the EU more than a year earlier.

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