Market News

Russia imports of mandarin and grapefruit on the increase

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Russian citrus imports rose by 6% last year compared to 2012. The markets for mandarin and grapefruit in particular show high growth rates, respectively 40% and 34%, reports the Russian website fruitnews.ru. Turkey and Morocco traditionally are the two main citrus suppliers, but have to surrender a part of their market share to South Africa and Egypt. A striking newcomer on the mandarin market is Georgia.

Russia imported 1.7 million tons in 2013, accounting for 1.68 billion dollars. An increase of 6% compared to the year before. The main suppliers of citrus are Turkey and Morocco, accounting for 40% of the total volume. Egypt is third, followed by South Africa and China. The first EU country on the list is Spain occupying the sixth place. Cyprus and Greece are good for respectively the eleventh and twelfth place.

Mandarins and oranges are the most popular citrus fruits amongst the Russian consumers. Last year Russia imported more than 838,000 tons, accounting for almost half of the total citrus import. The largest mandarin suppliers are Turkey and Morocco. Although the volume from Morocco decreased compared to the previous years, the volume from Turkey grew. Together both countries account for half the mandarin supply. Other major suppliers are China, Pakistan, Spain, Argentina and Abkhazia. In October 2013 Georgia was allowed to supply the Russian market and ended up twelfth on the list with 12,000 tons.

Oranges were mainly imported from Egypt and South Africa. Volumes grew to 70% of the import. In total Russia imported 500,000 tons of oranges. Other major suppliers of oranges were Turkey, Spain and Morocco.

Grapefruit import grew by 20% compared with 2012 to 147,000 tons. The largest supplier of this citrus fruit is China, followed by Turkey, South Africa and Israel. The rise in consumption is due to media attention.

In the first quarter of this year, import fell by 11% to 577,000 ton. Key suppliers are Morocco, turkey, Egypt, Pakistan, China and Spain. New comer Georgia exported 2.6 tons of mandarins to Russia.

Expressed as a percentage, the market share of the export countries is stable. Turkey is on top of the list with 24.6%, followed by Morocco (14.5%) and Egypt (14.1%). In recent years the import of mandarins increased by almost 40% from 605,000 tons in 2010 to 838,000 tons in 2013. The import of grapefruit is also on the rise, growing 34%. In 2010 109,000 tons was imported, in 2013 it rose to 147,000 tons

The orange import grew with 5% from 478,000 tons in 2011 to 504,000 tons in 2013. The volumes from Egypt and South Africa are growing at the expense of Morocco and Turkey.

www.freshplaza.com

Belgorod Oblast to produce 1 mln tons of apples a year

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The Russian region of Belgorod is expected to produce one million tonnes of apples per year; a third of the Russian demand for this fruit. The head of Belgorod Oblast’s Department of Agriculture, Stanislav Aleynik, pointed out that last year, according to the Federal Customs Service, Russia imported $ 6.2 billion worth of fruits and berries, 40% of which could have been grown in Russia.

“After joining the WTO in 2012, customs tariffs have significantly fallen, so the volume of apple imports increased,” said Stanislav Aleynik. “Thus, Russian buyers are investing more than 500 million Euro in the development of foreign economies.”

According to officials, this is due to lack of domestic product in the market, but the situation can change. In the Belgorod region, the gross apple harvest last year reached 47,000 tonnes. More than half of the large companies have expanded and the average yield has improved with the growth of intensive orchards, where it is possible to grow 40 tonnes of apples per hectare.

Stanislav Aleynik noted that, in the future, depending on the number of trees planted per hectare, there will be three planting schemes, each needing a different investment and generating different levels of revenue. With the maximum density (2.5 thousand apple trees per hectare), the cost would be of 2.9 million Roubles, but within three years, when the trees begin to provide a stable yield, the net profit would be of 785 thousand Roubles per hectare.

However, the head of the Russian Association of Growers and CEO of a large Belgorod company, Victor Gorodov, noted that the main issue would be where to get so much quality planting material. According to Stanislav Aleynik, to achieve Belgorod’s goals the region would need an additional 27 million seedlings, and a lot of money.

However, Victor also believes that agriculture in Russia is easier than ever, as the technology has already been implemented. Besides, if we talk about the Belgorod region, the unique soils allow local fruit producers to compete with Western growers.

www.fruit-inform.com

Magnit fined $581 for endangering consumer health

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Administrative sanctions have been brought against the Magnit supermarket chain, which is owned by Tander, for numerous violations threatening the health of consumers. Charges brought against the company for violations of sanitary regulations were found to be justified by the Arbitration Court of St. Petersburg and the Leningrad Region, Fonatank.ru reported on June 14.

Supermarkets in the Magnit chain were inspected in Autumn 2013 according to a schedule agreed upon by prosecutors. Federal Service for Supervision of Consumer Rights Protection and Human Well-Being inspectors in St. Petersburg found evidence that the chain was selling substandard product, including rotten cucumbers and fish. An examination of cranberries sold by Magnit revealed the presence of cesium-137 in levels of up to 320 becquerels per kilogram.

The company denies the charges. The director of the St. Petersburg branch of Tander Vladimir Dubinin argued that most of the health department violations had not been documented. He rejected the findings of the supervisory authority on the sale of substandard product. “The official documents do not conform to current legislation,” Dubinin told Fontanka.ru.

www.freshplaza.com

Azbuka Vkusa adds a new format

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The retailer Azbuka Vkusa announced launching new format of supermarkets – AV Market. As it has been known from Vedomosti newspaper Andrey Tkemaladze is going to be a director of the new chain of supermarkets.

According to the top manager, 5 hypermarkets, which Azbuka Vkusa gets as result of a deal with Spar, are going to be rebranded by the end of the year. Complimentary to rebranded Spar hypermarkets this year another 5 new hypermarkets will be opened: 3 – in Moscow, 2 – in Moscow region. The retailer is planning to open not less than 5 new AV Market hypermarkets per year.

When developing this new format supermarkets Azbuka Vkusa was deeply learning a background of USA supermarket networks such as Wegmans, Whole Foods, Trader Joe’s.

Target market of AV Market is going to be wider than usual Azbuka Vkusa has. The retailer wants to carry out a new format – a market inside a store, where customers can bargain and get a discount depending on goods’ amount.
An average bill will be around 1000 Rubles and that is 1.5 lower than in usual Azbuka Vkusa supermarkets, but higher than in other super- and hypermarkets.

A product assortment is going to consist of 15,000-20,000 names. Groceries will take 10-15% of the whole amount of product assortment. A share of fresh products will take 50% of whole assortment. It is planned to create few in-store cafes, but it will depend on store square.

AV Market is going to be an anchor renter in shopping malls: minimal selling area of AV Market will take 2000 square meters, maximal – up to 10,000 square meters.

www.retailer.ru

Alaska: Salmon Prices Show Marked Seasonal Variations

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Salmon prices at wholesale show marked seasonal variations for both wild and farmed fish. It’s a pattern that has been tracked for decades by Urner Barry, the nation’s oldest commodity market watcher in business since 1895. The prices tend to decline through June, July, August and September and they begin rising again from November through the following April or May.

Two things drive the well-established pattern, said market expert John Sackton who publishes Seafood.com, an Urner-Barry partner.

“There’s a growth cycle for farmed salmon when they eat more and grow faster at certain times of the year, and so the harvests, particularly those that come into the US market from Chile for example, really peak in June, July and August, which are our summer months and the winter months in Chile,” Sackton explained. “Then there is the opening of the wild salmon season each summer and all of a sudden you get a lot more diversity and availability of Alaskan salmon.”

Sackton said buyers of both wild sockeyes and farmed salmon are starting to push back a bit on high prices. That’s likely reflected in the $3.50 advances for the first reds at Copper River in mid-May, which was down 50 cents from last year’s starting price.

A big wild card for North American salmon this summer is the projected 72 million sockeye return at British Columbia’s Fraser River. Sackton said Japanese buyers, who have been somewhat priced out of the sockeye market in recent years because there has been so much demand elsewhere and a drop in the yen has made it harder for them to buy, are hoping that a big run will open up more opportunities for them. Even though they’ve been buying less, Japan is still an important part of a three legged stool.

www.thefishsite.com

Californian grape harvest ahead of last year’s

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An early start to the grape harvest in California has the state’s production ahead of what it was at this point last year. Harvesting is expected to continue through December, and shipments are anticipated to continue through February of 2014.

“The season started early,” noted Kathleen Nave, President of the California Table Grape Commission. “We started harvesting during the last week of April, and the season has been good so far.” Nave attributed the early start to a combination of weather factors that led to grapes that were ready to be picked earlier than usual. The early jump to the season has made for good volumes of fruit. While shipments of grapes were at 2.3 million boxes at this point last year, California’s growers have shipped 3.2 million boxes of grapes so far this season.

“We’re significantly ahead of last year’s crop, and we expect to keep that pace up,” said Nave. The bulk of the state’s grapes are currently coming from the Coachella Valley, and harvesting there will continue through the end of June. Harvesting in the San Joaquin Valley is expected to get under way around the fourth week of June. Total volume for the state this season is expected to be close to last year’s volume of 117 million boxes.

“The crop size will be similar to last year and quality is excellent,” said Nave. “We’ve also had two more weeks on the front end to ship product, so, from a marketing standpoint, it’s shaping up to be a very good year.”

www.freshplaza.com

Magnit and Lenta conquering Siberia

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Magnit and Lenta, along with a local chain, Holiday Klassik, will be the key retailers in the region in the future. Their market penetration in the region will grow faster than those like X5 and Auchan, while product availability on their shelves may become better thanks to the investment into distribution centres.

Russia’s leading market player Magnit, which has operated a distribution centre in Omsk since 2012, recently launched a 19,000 square metre leased distribution centre in Novosibirsk. Investment in logistics facilities clearly shows retailers’ focus on the store expansion in Siberia. Magnit opened its first store in Siberia in 2010 and expand the network to 120 by the end of 2013.

St Peterburg based Lenta opened its first hypermarket in Siberia in 2006 and since then it has opened 17 large outlets. In addition to that it opened a 37,500 sq m distribution centre in Novosibirsk last year. The retailer recently opened its first hypermarket in Krasnoyarsk and it is building its sixth store in Novosibirsk while a new store is planned for Novokuznetsk.

Auchan operates two Auchan hypermarkets and two Auchan City compact hypermarkets, X5 runs 25 small stores and one hypermarket while O’Key has five hypermarkets and one supermarket. In contrast to them Dixy Group and Rewe Group have not penetrated the region yet.

www.freshplaza.com

Boycott harmful to Russia and EU

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Tensions between the EU and Russia are increasing. Russian interference in the political turmoil in Ukraine and the alleged presence of Russian troops in the Crimea, led to the EU imposing sanctions against Russia. At the time this article went to press, there was as yet no official reaction from Russia. However, the EU already announced further sanctions. And although political responses are difficult to predict, the tensions also affect the European fruit and vegetable sector.

“We have to wait and see what impact this will have, and whether counter restrictions, are to be expected,” says Inge Ribbens of Frugi Venta. “Until now, fruits and vegetables are still exported. Potatoes have an import ban, but the sector isn’t affected yet.” Arjan Zoutewelle of the same import and export company, sees tensions rise. “I noticed that the sector, say forty percent of it, is nervous, and that there is uncertainty about the devaluation of the ruble. In the long run, a low ruble is not good for business. In Russia, imported products are therefore more expensive.”

If there is a threat to domestic crops or human health, boundaries are often closed, but there may also be a political agenda behind a boycott. In February, Romain Cools of Belgapom suspected a political agenda behind the potato import ban on Russia. He then said: “Russia is not only closed to the potato and the seed potato sector, but now European pork is no longer allowed in. The Russians found an alternative with American pork, which increasingly seems to point to a political motive.”

Exports to Russia mainly consists of products such as machinery, chemicals and processed products. About eight percent of exports consist of food and live animals. Fresh produce makes up the biggest part. In general, a boycott of European fruit and vegetables to Russia may be more problematic than in Europe, expects Arjan Zoutewelle. The world can’t always meet Russian demand. It also depends on the countries and products that fall under a boycott. More worrying is when the Russian border is closed and there is a good harvest in Europe. “If there is a boycott, we better not have over-production in Europe, because then we really need Russia to buy our production peaks.”

www.freshplaza.com

“Green” retailers

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Greenpeace made an annual rating called “Green supermarket” where Russian retailers are rated by the level of contribution in recycling problem solvation. First places were taken by “Auchan” and “Dixy”.

Experts were comparing and estimating 10 biggest supermarket networks – “Auchan”, “Dixy”, Х5 Retail Group, “Lenta”, “O’kay”, “Magnit”, “Holiday classic”, “Maria Ra”, “Sedmoy Continent” , and “Monyetka”. These retailers were estimated by 20 criteria such as receiving packaging for further recycling, reduction of packaging, a possibility of using own packaging for catchweight goods, a presence of goods with ecofriendly packaging.

“Auchan” took the first place due to the opening recycling centers in St. Petersburg and the possibility of buying catchweight goods. “Dixy” was also pointed out because of the presence of recycling centers in Moscow and the sale of original non-disposable bags.

“O’kay”, “Sedmoy Continent”, and “Monyetka” are turned to be at the end of the rating list.

“Unfortunately, even leaders of our list are far from being “green” retailers. However, most of them are changing their policy: refusing from free plastic bags, letting do weighting of fruit and vegetables without packaging, and even opening recycling centers. Directors of stores understand that such actions are attracting attention of new clients and making their stores more competitive on the market,” – Rashid Alimov, a coordinator of “Greenpeace Toxic Program”, said.

www.retailer.ru

Magnit plans an expansion in Siberia

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Experts made a forecast about a boost in development of supermarket network Magnit in Siberia. This forecast is based on a launch of a new distribution warehousing center with a total square of 20 000 m2 in Novosibirsk. In future it will help “Magnit” to increase profit and a number of salepoints in Siberia.

The positive reaction of investors is explained by new logistics capacity. It will help the company to extend its presence in Siberia and to accelerate the pace of development of the supermarket network itself. This will positively influence the dynamics of the company’s profit growth.

It is to be recalled that in the end of 2013 Magnit owned only one distribution warehousing center in Siberia – in Omsk Region. It is expected that Magnit is going to start an active expansion in Siberia after creating the necessary logistic structure in Novosibirsk Region.

According to the Magnit’s plan of expansion, 1500 new salepoints will be opened in 2014, which is more than in 2013 by 291 salepoints.

www.retail.ru