Import substitution

Russia aims to import only citrus and exotics by 2020

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Russia aims to import only citrus and exotic fruits by 2020 and thus achieve self-sufficiency for the main food categories, according to a statement from the Deputy Minister of Agriculture, Yevgeny Gromyko.

“By 2020, Russia will reach almost 100% self-sufficiency in foodstuffs like milk, meat and vegetables; imports will be limited to products like citrus and exotic fruits, which we are unable to grow in our country,” said Mr Gromyko.

During a meeting of the heads of agriculture of the BRICS countries, Yevgeny Gromyko noted that BRICS countries have huge resources and that “the five countries are key suppliers of agricultural products on the world food market.”

In this regard, he highlighted their great potential for mutual cooperation, reporting that Russia is ready to make the maximum contribution to this project.”

Russia is currently self-sufficient in grain and most types of meat and has managed to significantly improve its vegetable production.

www.freshplaza.com

Russian ministry invests in agriculture

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The Russian Ministry of Agriculture recently presented ambitious plans. 1500 hectares of greenhouses are to be built in the next five years, the harvest of tomatoes and cucumbers is to rise to 850,000 tonnes. 65,000 hectares of apple orchards are also to be planted, which should raise the harvest by 1.3 tonnes. To do all of this 270 billion roubles (3.4 billion Euro) is needed, the ministry has calculated.

www.freshplaza.com

Russia to increase Sri Lankan tropical fruit imports

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Russia is interested in importing seasonal fruits from Sri Lanka, reports the news agency Tass. This was reported by a representative of the Russian commission and the head of the Federal Fishery Agency Ilya Shestakov at an intergovernmental Russia-Sri Lanka meeting.

‘’We are interested in increasing the supply from Sri Lanka. Now the main import is tea, but we are interested in sourcing seasonal fruit and vegetables which will not compete with those produced by our agriculturalists,’’ he said.

Chairman of the Sri Lankan Intergovernmental Commission and Deputy Minister of Industry and Commerce, Tennekun Mudiyanselage, said that the country can supply Russia with tropical fruits such as pineapples, mangoes, kiwifruits and bananas.

In exchange Sri Lanka hopes to increase imports of grain from Russia.

www.freshplaza.com

Russia will import more fruits and vegetables from Latin America

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On February 10, the Deputy Minister of Agriculture of the Russian Federation, Sergey Levin, met with the Minister of Livestock, Agriculture and Fisheries of Uruguay, Tabare Aguerre, to discuss the prospects for cooperation in the field of agriculture.

“Russia and Uruguay have the chance of boosting trade between them. Russia is interested in increasing imports of Uruguayan agricultural products, such as vegetables and fruit production, because of the climatic advantages that Uruguay has,” said Levin.

Argentina is another Latin American country with a great potential to increase its exports of food products to the Russian market. Argentine good exports to Russia in 2016 may grow if the authorities of the Latin American country eliminated export taxes, said the Russian ambassador to Argentina, Victor Koronelli, in an interview with RIA Novosti.

“Fruit producers are greatly interested in increasing exports of apples, pears, and some citrus fruits like lemons, tangerines, and grapefruit to Russia,” he added.

The ProdExpo fair, one of the most important agricultural food fairs in Eastern Europe, will be held in Moscow this week. This platform should promote collaboration between producers and importers from Russia and other countries, including Latin America.

www.freshplaza.com

Finnish businessman develops processing wild berries in Northern Russia

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Finnish businessman Osmo Kolu operates a facility on the Kola Peninsula, in the far northwest of Russia, he is developing gathering and processing wild berries in the region. Kolu says that this initiative, together with the enterprise’s processing capabilities, is a good opportunity in terms of Russia’s strategy to substitute imports with domestic production. The company’s main activities are sorting, processing and freezing berries – cranberries, cloudberries, blueberries, lingonberries, crowberries.

Some berries, for example, cloudberries, are mostly exported to Scandinavia countries, some, such as blueberries, are sold within Russia.

The company is going to expand its activities in Russia as a part of import substitution program.

www.fruitnews.info, www.ria.ru

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 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

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

Import substitution program

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Since the beginning of 2015, the growth of domestic production in Russia has not covered the reduction in imports. The reason of decline in imports is not import substitution policy, but reduction of domestic demand. Out of the 100 companies, that reduced import or stopped importing at all in the first quarter of 2015, only 17% increased the purchase of Russian products, according to the June research of Russian Presidential Academy, International Institute of Economics and Law and All-Russian Academy of Foreign Trade. If consumer pent-up demand will be fulfilled in the second half in 2015, import substitution policy may turn into prices growth for domestic and imported goods.

www.dvnovosti.ru

Changes in Russian fishing industry in 2015

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This year russian fishing industry will face serious changes. Russian fishermen have to fill the space on local shelves after the ban on the import of seafood.

In Rosrybolovstvo (Federal Agency for Fishery) can stimulate producers to sell the catch inside the country using administrative measures.

From 22 to 28 af April 2015 Rosrybolovstvo together with Moscow government for the first time hold in Moscow a “fish week”. The main idea is to turn russian buyers on the domestic fish and to bring together suppliers and sellers of fish products.

“For us it is important that local fish comes into the Russian market,” – said the head of Federal Agency for Fishery Ilya Shestakov.

This year generally the catch is just 4% higher than previous year, mainly because of good catch in Far East basin, in the Northern basing the situation is worse because of bad weather and the reduction of quotas for some species.

In previous years Russian fishermen has lost their positions in the Russian market and has been sending their catch to the export. And now the shelves are empty and Rosrybolovsto tries to turn the catch back inside the country.

The problem is not only the interest of fishermen – to sell more expensive – but also retailers are used to get large quantities of nice packaged imported fish that is able to compete for the buyer with the meat products. And there is also economic interest of transport companies that prefer to move the product that is paid more.

And now, after the ruble has lost its positions fishermen has more motivation to ship abroad to receive foreign currency. Domestic prices for fish increase following the foreign prices. But no one is interested in fact that food prices are rising too quickly.

The head of Federal Agency for Fishery doesn’t rule out the adoption of administrative measures to reduce the export of fish (such as increase of export duties on fish that will make it unprofitable).

In addition, this year Rosrybolovstvo promises to solve the problem with transportation. For certain types of fish they plan to introduce subsidies and reduce tariffs for transportation in refrigerated containers.

www.tks.ru