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Vegetable prices keep climbing in Russia

Russia’s retail sector is highly dependent on imported vegetables – particularly during the off-season. In 2014, Russia imported 2.4 million tons of fruits and vegetables making it the third largest importer globally.

Fruit and vegetables prices in Russia were up 43% in February 2015 compared to the same month last year, a new report by the US Department of Agriculture says.

Titled ‘Vegetable Prices Keep Rising’, the report on the Russian Federation blames the import restriction, in combination with a depreciating ruble, for the soaring prices.

It also says many Russian consumers are buying less vegetables or switching to cheaper ones as their purchase power drops along with Russia’s weakening economy.

Russia’s retail sector is highly dependent on imported vegetables – particularly during the off-season. In 2014, Russia imported 2.4 million tons of fruits and vegetables making it the third largest importer globally.

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The report also says that the most popular vegetables for Russian consumers are cabbage (21% of total vegetables volume), tomatoes (20%), onion (13%), carrot (11%), cucumbers (10%), beets (6%), pumpkin (4%), and squash (3%).

In 2014, Russia produced 15 million metric tons (MMT) of fresh vegetables which covered around 86% of total domestic consumption needs. The vast majority of all vegetables in Russia (70%) are grown by households and do not enter modern retail channels.

The main vegetables produced in Russia, besides potatoes, are cabbage (3.4 MMT), tomatoes (2.2 MMT), onions (1.9 MMT), carrots (1.6 MMT), cucumbers (1.1 MMT), pumpkins (708,000 MT), squash (508,000 MT), and garlic (248,000 MT).

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USDA Gain report “Russia: Vegetable Prices Keep Rising“

Click here to read more news about the Russian market. 
 

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Tough time for Israeli citrus market, says USDA

The Israeli citrus market's export value has been negatively affected by external shocks and unfavorable weather, reports the USDA.

External shocks and adverse weather have rocked the export market for Israeli citrus, according to a report by the US Department of Agriculture.

The Israeli shekel has strengthened about 10% against the Euro in the last year, making Israeli citrus exports less profitable in the EU, a market to which two-thirds of its citrus exports go.

The Russian financial crisis is also hurting Israeli citrus exports. The rapid depreciation of the ruble against the shekel has brought trade to a standstill since February. And exports to Japan have also taken a hit due to economic slowdown there.

Israel is consequently increasing its exports to long distance markets, mainly South Korea, the US, and Canada, the USDA said. “However, these markets remain small with the US and the Canadian markets capturing 3-4% of the total Israeli citrus exports.”

Meanwhile, in January, about 6,000 ha. of citrus were damaged due to hail storms and winds estimated to have caused overall damage worth NIS 70 million ($17.7 mil) to Israeli agriculture, affecting thousands of acres of avocado and citrus crops and some row crops in the south. The citrus damage would have been worse if not for the protective nets used in groves. “Despite the weather disturbances, export quantity was not affected significantly and this is mainly to a good crop and that made up for the weather,” the USDA said.

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Israel’s best seller in citrus is the Orri mandarin, an easy-peeler which accounted for about 40% of Israeli citrus exports (64,478 tons) in the 2014/15 marketing year and mainly goes to the EU and. “Orri is still profitable, but it’s just less profitable per unit than it could be and this is due to the weakened Euro,” the USDA said.

“Orange exports in MY 2014/15 have declined marginally compared to the previous two years because of strong domestic demand (see table).  The decrease in grapefruit exports in MY 2014/15 is mainly due to the fact that about 1,100 ha of red grapefruit (star ruby and Rio-red varieties) were uprooted in the last 3 years due to low profitability,” it said.

Source: “External Shocks and Weather Conditions Challenging Citrus Revenues” a Global Agricultural Information Network (GAIN) report by the USDA’s Foreign Agricultural Service (FAS) 

Image: “Lemon Orchard in the Galilee by David Shankbone” by David Shankbone (attribution required) – own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons.
 

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Updates from the Russian Federation

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News briefs from around Russia

Chinese investors come to Caucasus
The government of Ingushetia (a Federal Republic in Caucasus region) agreed to lease 100 ha of land for Chinese investors who are going to grow fruit and vegetables there and build a modern logistic centre, M. Malsagov, general director for investing development, told the Ria Novosty news agency. Ingushetia had previously signed an agreement with Chinese businessmen for their participation in the development of various projects in the republic.

German farmers lost more than €600 million
German farmers affected by the Russian embargo have incurred direct losses of more than €600 million, according to estimates from DBV, the German Farmers’ Association. There are also indirect losses related to the oversaturation of the domestic market and pricing pressure, reports the Agriacta agency.

New B2B platform in Tula region
Magnit, Russia’s largest food retailer, is cooperating with the authorities of Tula region for a project “catering saving purchase”. Thus, Magnit may become a competitor to Metro C&C, says the Vedomosti.ru agency.
Magnit has For several years been developing related businesses, producing vegetables, greenery, spices, dressings, dry fruit, berries and herbs.
Founded in 1994, Magnit is headquartered in the southern Russian city of Krasnodar. As of March 31, 2015, it operated 28 distribution centers and over 10,000 stores (8,581 convenience, 300 hypermarkets, and 1,239 drugstores) in approximately 2,180 cities and towns throughout 7 federal regions of the Russian Federation.

 

NV

 

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Recent impact of Russian ban on prices for certain EU produce

European Commission presentation on the impact of the Russian import ban on prices for certain fruits and vegetables.

There’s been an upward trend for mushroom prices and stable prices for pears, carrots, kiwis, and oranges and lemons in the EU, according to the European Commission.

But the price situation for tomatoes and peppers has been mixed and there’s been a downward trend for apples.

That’s according to a presentation on the impact of the Russian import ban on prices for certain fruits and vegetables which the Agriculture and Rural Development Directorate made at the February 17 meeting of the Committee for the Common Organisation of the Agricultural Markets.

Hightlights of the presentation include:

MARKET UPDATE

Apples
Prices decreased in the two Member States with the lowest prices (-6.8% to 20 EUR/100 kg in PL and -4% to 26.6 EUR/100 kg in DE).
Pears
Prices registered stability (current prices are 8.8% under the historical average).
Citrus
Prices over 3-year average (22.2% higher for oranges and 6.7% for lemons).
Tomatoes
Significant price reduction in IT and moderate in ES (current average for tomatoes is 9,8% above the 3- year average).

MARKET CONTEXT

Exchange rates of Dollar to both Euro and Zloty: extra-EU exports and opening new export markets more attractive, helping to restore market balance.
New export destinations: The US has lifted an old ban on imports of French apples and pears from, following a bilateral agreement on sanitary controls.
Lower supply in Southern EU due to adverse weather conditions and low temperatures: Positive impact on prices.

SUMMARY MARKET SITUATION

Positive trend:
Mushrooms (downward trend reversed last week)
Price stability:
Pears (BE price = 46.5)
Carrots (lowest prices in NL & PL)
Kiwis (prices much higher than 3-year average)
Oranges & lemons
Downward trend:
Apples (20 EUR/100 kg in PL and 26.6 in DE)
Mixed situation:
Tomatoes
Peppers
 

 

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source:
Evolution of EU prices of certain F&V
European Commission DG Agriculture and Rural Development Directorate C. Single CMO, economics and analysis of agricultural markets

 

 

 

 

 

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Russian ban spells shrinkage in apple trade

APPLES red - Edited

Global apple crop will also contract this year – to just under 71 million tons – despite bumper season in the EU, USDA projections show

Global trade in fresh apples is set to drop more than 5% in 2014/15, mainly due to Russia’s ban on fruit from certain countries, says the US Department of Agriculture (USDA). Indeed, Russian imports will likely plunge 27% on the previous marketing year, to 800,000 tons, the USDA’s Foreign Agricultural Services forecasts in its “Fresh Deciduous Fruit (Apples, Grapes, & Pears): World Markets and Trade” report.

Imports from other countries are not expected to replace these volumes due in part to the devaluation of the rouble, a slumping economy, and rising inflation in Russia, it said. EU apple imports are headed downwards, too. The USDA predicts a drop of 12% on last season, to 550,000 tons, “as increased output and the effect of the Russian ban saturate the domestic market.” And apple imports into the US are also predicted to slide, in this case by 11% to 190,000 tons.

Growth in Mexico, Canada, India, Brazil and China

But on the positive side, growth on 2013/14’s imports is expected in Mexico, Canada and India, with respective volumes of 260,000, 225,000 and 200,000 tons. The USDA data also shows Brazil’s apple imports (for which Argentina and Chile are usually the main suppliers) had a growth spurt from 94,000 tons in 2012/13 to 117,000 the next year and are expected to surge to 150,000 this marketing year as production in Brazil stays at about 1.33 million tons. And in China, apple imports are set to rebound to earlier levels – about 40,000 tons – thanks to higher domestic prices making imports more attractive and the re-opening of the market to Washington state apples.

Read more on page 93 of edition 135 of Eurofresh Distribution magazine.

 

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Russia claims Israeli pepper shipment poses pest risk

Russia’s veterinary and phytosanitary authority Rosselkhoznadzor says more than 25 tons of peppers from Israel were detained at the Black Sea port Novorossiysk due to fear of the spread of the western flower thrip.

Russia has blocked the import of more than 25 tons of peppers from Israel, saying they pose a risk for the spread of western flower thrips.

The Russian veterinary and phytosanitary authority Rosselkhoznadzor said the move followed inspection at its main Black Sea port Novorossiysk, in the region of Krasnodar Krai.

In a statement in Russian on its website, it said the peppers had been detained to prevent the introduction and spread of the pest in the Russian Federation.

The authority also said that in the year to date, quarantine officers in Krasnodar Krai and the Republic of Adygea have already detained 4 pepper shipments, totalling more than 60 tons, because they did not did not meet Russia’s phytosanitary requirements.







 

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Fresh Food Russia Forum November 13-14 in Moscow

borrar russian stores

 

About 300 delegates from 50 federal and regional retail chains are attending the Fresh Food Russia Forum being held November 13-14 at Moscow’s Kosrton Hotel.
 

Dedicated to fresh grocery and in-store produce, the event also includes opportunities to join a special negotiations session with commercial directors, purchasing directors and buyers from retail chains from Kaliningrad to Khabarovsk.
 

According to the Fresh Food Russia Forum organisers, the recent US and EU food import ban by Russia means the country’s retail chains are in search of new suppliers. “They are looking for reliable international partners.”
 

“Russia was the leading retail market by turnover in Europe in 2013. Two thirds of Russian customers are willing to pay more for fresh grocery, according to recent surveys by consulting firms,” they said.

 

More information and registration:

Kseniya Kamenskaya, +7 (495) 785-22-06, 781-11-34

Official forum web site:

http://www.b2bcg.ru/events/fresh-food-russia-2014