Russia

Russian greenhouse vegetables increased in 2013

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Russia’s greenhouse vegetable cultivation industry in 2013 is on the rise. The greenhouse vegetable production has increased by 6.7% in 2013 as compared with 2012. According to the Russian Federation National Bureau of Statistics, the total output growth rate is the highest in the region of Ural in 2013 with an increase of 28%.

Vegetable greenhouses in the Volga Federal District have maintained a leading position in vegetable production in 2013. With a production output of 184,000 tons, they produce tomatoes, cucumbers and green vegetables.

Analysts in the Russian Central Federal District indicated that the greenhouse market situation is developing and consumer demands are increasing. More investors are investing in the vegetable greenhouses in the south of Russia. They estimate that in the next three years, the industrial greenhouses and vegetable production southern Russia will be significantly improve and develop.

Currently most of the fresh vegetables in Russia have been imported from abroad. High demand for fresh fruits and vegetable normally come from the capital city of Moscow during the low season.

www.freshplaza.com

Russia threatens Kiev with limits on agrarian trade

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Dmitri Medvedev, the Russian Prime Minister, has threatened the Ukraine with “serious sanctions” in the agrarian trade if their neighbouring country were to leave the Commonwealth of Independent States (CIS) or sign an agreement of union with the EU. A limit on the bilateral trading regime would be unavoidable, as Moscow is obliged to represent the interests of its agricultural producers, said Medvedev on the 5th of April during a congress of national delegates in Wolgograd.

The adjustments would take place within the framework of the rules of the World Trade Organisation (WTO), he assured them. Medvedev had previously stated that Moscow would respect the decision of the Ukraine to integrate into the EU, but that it would have to protect itself against possible consequences that could arise due to the easier access EU products would have to the Ukrainian market.

www.freshplaza.com

Russian retailer Lenta undeterred by Ukraine crisis

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Jan Dunning, CEO of St Petersburg-headquartered hypermarket chain Lenta, says the situation in Ukraine has had no impact on the group, as consumer confidence remains unaffected in Russia.

The breakaway of Crimea from Ukraine marked a key pressure point in the crisis, after the region’s residents voted overwhelmingly in favor of joining Russia.

Dunning said that consumer demand in Russia was unaffected by the ongoing conflict with Ukraine, but that Western sanctions on the country had weakened the rouble. Over the year-to-date, the dollar has risen almost 8.5 percent against the Russian currency. As a result, Lenta was looking to source products from within Russia, or from China.

Also on Thursday, Lenta reported robust sales growth of 37.3 percent for the first quarter, during which the chain opened two new hypermarkets. Dunning said Lenta’s expansion plans were undeterred by the Ukraine-Russia turmoil, with plans to open 24 hypermarkets and 15 supermarkets in 2014.

www.cnbc.com

Magnit Named One of Europe’s 50 Most Valuable Brands

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Magnit, Russia’s largest food retailer, has been named one of the 50 most valuable brands in Europe.

The brand is worth $272 million, placing it 44th on the list just after The Body Shop and before such retailers as department store Debenhams and mobile phone retailer Carphone Warehouse, according to the report Best Retail Brands 2014 by brand consultancy Interbrand.

Magnit’s earnings rose 26 percent in 2013 to $18.2 billion with a net profit of $1.1 billion. By comparison, the company’s primary competitor X5 Retail Group, owner of supermarket chains Pyatyorochka, Perekryostok and Carousel, saw earnings of $16.8 billion and a net profit of $345 million.

Magnit had more than 8,000 stores across the country in late 2013, while X5 had about 4,500 locations.

Despite its strong position in the market, Magnit cut its full-year 2014 sales growth forecast from 25 percent down to between 22 and 24 percent to account for reduced consumer confidence stemming from Russia’s weak economic growth. The IMF has predicted that Russia’s gross domestic product will grow by a mere 1.4 percent in 2014, revised from an earlier forecast of 2 percent.

www.themoscowtimes.com

X5 Retail Group Q1 retail sales up 13.9%

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X5 Retail Group N.V., a Russian food retailer, reported first-quarter retail sales of RUR 143.90 billion; an increase of 13.9% from RUR 126.30 billion, previous year. Like for like sales improved 6.3% during the quarter.

X5 Retail Group N.V. operates several retail formats: the chain of economy class stores under the Pyaterochka brand, the supermarket chain under the Perekrestok brand, the hypermarket chain under the Karusel brand, Express convenience stores under various brands and the online retail channel under the E5.RU brand. At 31 March 2014, X5 had 4,618 company-operated stores.

www.freshplaza.com

Russia: imported product prices increase by 15-20%

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Higher School of Economics (HSE) warns about a soon price increase on imported goods as well as on goods produced with imported raw materials. All details are reflected in a report called “About business climate condition in retail sector in first quarter of 2014…”.

“Retailers are expecting a further weakening of ruble. Imported goods which were bought at earlier exchange rates hold out only few more months”, – Georgy Ostapkovich, the author of the report and the director of HSE Centre of Market research, explained his predictions in the interview to RBC Daily.

Retailers are now seeking for a possibility to substitute imported products to domestic ones to neutralize the price increase.
By HSE estimates, Russia is strongly depending on imports: in average 33% of goods sold through both networked and non-networked retailers are imported. Moreover, the share of imported goods is pretty stable during the last few years, as Georgy Ostapkovich added. That means the prices on goods which can’t be replaced by domestic equivalents will increase by the end of the second quarter of 2014.

Ruble has started to weaken since the middle of February 2014, but expected price increase has not been recorded by Rosstat yet. A main rule for suppliers is that a supplier must inform a retailer about release price increase in a period of 30 days.

In fact, the price raising is step by step overtaking retail networks. For example, in “Dixie” a price increase on foreign fruit and vegetables is about 10-25%, on dairy products – 7-15%, sugar – about 8%. Meat products suppliers are going to raise prices by 10% or even more.

In “O’kay” a general price increase of 15-20% is detected. Retail prices on fish have grown up by 20%, on chocolate and nuts – by about 15%. The price increase on dairy products is the same as in “Dixie” – about 15%.
Furthermore, release prices on non-food range of products are also rising by 10%. Especially prices on cloths (90% of imported items), household appliances (80% of imported items), sport goods, office supplies and toys (70 % of imported items) are growing up dramatically.

According to Rosstat, the inflation in March was 1%, since the beginning of 2014 – 2.3%.

www.newsru.com

Russia: cold spell does not affect apple orchards

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Air temperature in the majority of regions of Krasnodar Krai decreased to 4-5 degrees below zero on the night of March 30th/31st.

On the previous day the Press Service of Southern Regional Center of the Ministry of the Russian Federation for Civil Defense, Emergencies and Elimination of Consequences of Natural Disasters said about probability of emergency situations connected with damages and losses of agricultural crops (flowers and sets of early stonefruit and pomaceous fruit crops, potato plants) as well as heat-loving plants.

According to Fruit-Inform data, such a sharp fall in temperature negatively affected stonefruit plantations in Krasnodar Krai, but had almost no impact on apple orchards. Local growers say of apples to start blossoming at least in a week. Before that, a cold spell does not constitute a serious danger for apples, as a decrease in temperature is critical during the periods of budding and blossoming.

www.fruit-inform.com

Ukraine banned sweets, fish and cheese from Russia

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Ukrainian Government Consumer Inspection banned a range of Russian products such as: confectionary by “Krasny Oktyabr”, “Rot Front”, “Russky Shokolad”, and “Babayevsky”, herring and canned fish from Kaliningrad region by “Vichunay-Rus” and “Roskon”, and cheese products by “Laktalis Istra”.

Now these products are being removed from sale due to their incompliance with Ukrainian law. According to the results of the inspection it emerged that Russian products are being sold in contrary to the Ukrainian law “About safety and quality of food products” (section 38), the law “About the protection of consumers’ rights” (sections 15, 19) and the Rules of food products marking.

“Currently Ukrainian Government Consumer Inspection takes all measures to remove pointed out Russian products from hypermarkets and major chains of supermarkets”, – it is said in the official web-page of Ukrainian Government Consumer Inspection.

www.ria.ru

Cental Bank’s forecasts

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Russian Central Bank is anticipating a decrease of GDP growth by less than 1% in 2014.

“Right now we think that the realization of our economic growth forecast for 2014, which was made last year, is hardly probable. We had expected the growth to be 1.5-1.8%. Now, in our opinion, the rate of growth deceleration till less than 1% is most probable”, – Elvira Nabiullina, the head of Russian Central Bank, said during the Association of Russian Banks conference.

According to Rosstat estimations, last year GDP of Russian Federation increased by 1.3%. This year Ministry of Economic Development is expecting a GDP slowdown till 1.8% in case of a capital outflow stabilization at the level of $60-70 billion. If the capital outflow is more than $100 billion, GDP growth will hardy be more than 0.6%. Concurrently, the official rate of GDP forecast remains at the level of 2.5%. It will be revised in the beginning of April.

www.retailer.ru

Russia’s X5 Finalises Ukraine Exit

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One of Russia’s biggest retailers X5 Retail Group has finalised the sale of its Perekrestok supermarket operations in Ukraine, the company said in a statement on Tuesday.

The sale of the retailer’s Ukraine unit, X5 Group Ukraine, which accounts for less than 0.3% of total revenue is “consistent with the company’s strategy to focus on core retail activities within the Russian Federation,” it said in the statement. It did not disclose the value of the deal, or its buyer.

X5 is the first Russian company to pull out of the country since Russia’s annexation of Ukraine’s Crimea region that followed the overthrow of Moscow-backed President Viktor Yanukovich.

Reuters have said that the deal had been in the works since October 2013, but the crisis over Crimea may have quickened the pace of talks.

Varus is buying the lease rights to 13 Perekryostok stores in and near Kiev, as well as in-store facilities and stock, Capital quoted Varus’s co-owner Ruslan Shostak as saying.

According to the 2013 financial report, X5 has 12 stores in Ukraine out of a total of 4,544 mostly across Russia.

www.freshplaza.com