For the first time since 2017, RosStat recorded a monthly deflation in Russia

In August 2019, consumer prices in Russia decreased by 0.2% compared to July, according to RosStat. The last time a monthly deflation was recorded in August and September 2017.

In August, food prices fell by 0.9%, while non-food products and services rose by 0.2%.

In August, the seasonal reduction in prices for fruits and vegetables influenced the food prices. Tomato prices fell by 24.9%, potatoes – by 22.4%, carrots – by 22.2%, onions – by 20.7%, beets – by 16.7%, grapes – by 16% , cucumbers – by 12.1%. Meanwhile, oranges prices increased by 2.8% and garlic – by 1.8%.

Year-to-August, inflation is 2.42% and year over year inflation rate is 4.33% 

Russia is Leading Market for Turkey’s Fresh Fruit & Vegetable Exports

According to data from the Eastern Black Sea Exporters Association (DKİB), Turkey exported around 2 million tons of fresh fruit and vegetable exports to 114 countries in the first eight months of the year, generating $1.2 billion in revenue.

In this period, the Russian Federation took the lead in the country’s fresh fruit and vegetable exports at 455,190 MT. During the January-August period, fresh fruit and vegetables exported to the Russian Federation amounted to $375.4 million, followed by Germany with $159.8 million, Iraq with $98.4 million, Romania with $81.5 million and Ukraine with $59.1 million.

Meanwhile, the Eastern Black Sea Region achieved $70.5 million in the export of 85,438 MT of fresh fruit and vegetables to Russia.

DKİB Chairman Saffet Kalyoncu said that in the first eight months of the year, Russia again took the lead in Turkey’s fresh fruit and vegetable exports. He recalled that Turkey reached $2.4 billion in exports to Russia from all sectors in the first eight months of the year, 8% increase compared to the same period last year.

Due to the Lack of Certification Mechanisms, Imported Organic Products May Disappear from the Russian Market

Russian suppliers of imported organic products are afraid of withdrawal from sale of goods that have not passed certification under the law “On Organic Products”, which will enter into force on January 1, 2020.

According to Kommersant, referring to a letter from Rusbrand’s Executive Director Alexei Popovichev, it is impossible to obtain Russian organic certificates due to the unavailability of the mechanisms, and imported products will have to be withdrawn from sale to change packaging, which threatens suppliers and retailers with big losses.

“In fact, imported organic products will not disappear from sale in Russia, because the word“ organic ”,“ bio ”,“ eco ”is on their label. These products will no longer be positioned on the shelf as organic. She does not disappear from the shelf. The law on organic matter itself is aimed at developing the domestic market, ”explains Oleg Mironenko, executive director of the National Organic Union.

The problem occurs when translating information on the packaging. Since all inscriptions in a foreign language must be translated into Russian, and the indication of the words “organic” and all its derivatives, according to the new law, must be supported by relevant Russian certificates, a problem arose for suppliers.

“The marking section influences the turnover of imported products. From the point of view of translation, it is not clear how to indicate the word organic in these conditions. Therefore, when translating, you will have to either omit the word “organic” or write “bio” or “eco”. There is a proposal that we are currently actively discussing: before installing all the mechanisms for imported products in the translation system, allow the word “organic” with international certificates, ”added the FNL Executive Director.

For the adaptation 2-3 years, manufacturers and suppliers of organic products must come to a decision in three scenarios. In particular, this includes access to mutual recognition of certificates with European countries and the establishment of conditions for circulation of imported products on the Russian market, the creation of a Russian certification system and the production of organic products at factories built in the Russian Federation, but using imported raw materials.

Russia Allows Access to U.S. Peanuts

On August 26, the Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor) lifted the ban on the import of peanuts into Russia from the United States.

From May 1, 2015 the Rosselkhoznadzor introduced a temporary restriction on the import of U.S. peanuts into Russia. The reason was the excess of cadmium content in two shipments of US peanuts compared to the level acceptable by Russian standards.

Russians Reduced Consumption of Potatoes, Dairy Products, Sweets and Bread

According to the Rosstat report, in 1980, Russians consumed 117 kg of potatoes per person per year, and in 2018 – only 59 kg. The consumption of milk and dairy products also dropped – from 390 kg to 266 kg, the consumption of sugar and sweets decreased from 35 to 31 kg and the consumption of bread products – from 112 kg to 96 kg.

At the same time, Russians began to eat more vegetables: the consumption increased from 92 kg per person per year to 104 kg, the consumption of fruits and berries increased from 35 kg to 74 kg.

Besides, Russians began to eat more meat and meat products – from 70 kg to 89 kg per year per person, the consumption of fish products also grew from 17 kg to 22 kg.

TASS: Five Years of Food Embargo. Results and Growth Paths for Russia’s Agriculture

Russia slapped a raft of measures against the European Union, the US, Australia, Canada and Norway in August 2014 in response to the EU’s and US’ sanctions, with the list expanded later by other countries. The so-called countersanctions ban imports of fruits, vegetables, dairy, and meat products from a number of countries to the Russian Federation. Representatives of departments and experts have told TASS about changes in the structure of Russia’s agriculture industry and about sectors that have gained traction over the past five years, as well as what goods will be substituted in the future.

According to the data provided by the Agriculture Ministry, Russia’s food imports dropped by 31.2% in the past five years from $43.3 bln in 2013 to $29.8 bln in 2018.

“In 2018, Russian food exports amounted to $25.8 bln in value terms compared with $16.8 bln in 2013. Exports of meat and fat-and-oil products, fish and seafood, processed products demonstrated a notable growth. Russia heads the list of biggest wheat suppliers and is among top three suppliers on separate goods items. The present international trade dynamics suggests that the country will become one of top ten global agriculture exporters in the midterm,” the ministry’s representative explained.


Russia Bans Import of Chinese Fruit Due to Contamination

Russia will suspend supplies of pome and stone fruits from China starting August 10 due to cases of contaminated products’ deliveries.

A representative of the country’s veterinary and phytosanitary watchdog (Rosselkhodnadzor) told reporters on Wednesday the ban will be extended on plums, nectarines, apricots, peaches, cherry plums, cherries, sweet cherries, apples, pears, and queen apples.

“The federal veterinary and phytosanitary service is forced to suspend the supplies of pome and stone fruits from China to Russia starting August 10, 2019. The decision has been taken due to continuing cases of China-originating products contaminated with dangerous quarantine for Russia objects supplied to the country,” the regulator explained.

The watchdog plans to hold consultations with the Chinese side and inspect the places of production, storage and packing of those products, which will be followed by consideration of trade resumption.

According to the Rosselkhoznadzor, over 900,000 MT of fruits and vegetables are imported to Russia from China annually: 180,000 MT of citrus, more than 190,000 MT of apples, pears, plums, nectarines, apricots, peaches, more than 80,000 MT of tomatoes, about 53,000 MT of potatoes, as well as 100,000 MT of onions and garlic.

In May, Rosselkhoznadzor lifted an import ban on stone fruit from North Macedonia and Serbia, imposed in August 2018. Some fruit from the two countries was banned after the watchdog said it had found the Monilinia fructicola fungus in Serbian peaches and apricots and in batches of fruit from North Macedonia.,

Russia to Toughen Rules for Transportation of Fruits, Vegetables Across Border from August 19

New rules for the transportation of fruits, vegetables and flowers across the border of Russia will take effect from August 19. Under the new requirements, people will be allowed to transport no more than 5 kg of vegetables and fruits in their luggage without special phytosanitary certificates.

Also, under the new rules, no more than three bouquets of flowers will be allowed for transportation in the baggage and hand luggage. Each bouquet can contain no more than 15 flowers, leaves or other plant parts.

Transportation of larger quantities of fruits, vegetables and plants will require phytosanitary certificates. In case of their absence, the regulated products will either be returned back or destroyed at the expense of the owner.

The new rules will be extended to all types of transport, including water, air, rail and road transport. In addition, the innovations will also concern members of the crews of ships, aircraft and dining cars crossing the border of the Eurasian Economic Union, as well as mailings.

A spokesperson with the Russian agricultural watchdog (Rosselkhoznadzor) told TASS that the government decree is designed to “harmonize the norms of supranational and Russian legislation.”

“Those rules that are set by the resolution, we have been observing them since July 2017, they were fixed by the decision of the Eurasian Economic Commission. The government resolution has been issued for harmonization of legislation,” the spokesperson said.

Previously, individuals did not have to obtain phytosanitary certificates for transporting vegetables, fruits and flowers in their luggage with the exception of seeds and potatoes.

Russia Prevents 3,000 MT of Illegal Imports Since Introduction of Sanctions

Russian consumer safety watchdog, the Federal Service for Supervision of Consumer Rights Protection and Human Well-Being (Rospotrebnadzor) has prevented shipments of more than 2,900 MT of products banned for import since sanctions were introduced, the watchdog said in a report on its website.

“Over the entire period of sanctions, at the checkpoints on the state border of the Russian Federation, the employees of Rospotrebnadzor prevented imports of more than 2,900 MT of prohibited goods,” the statement read.

Since the summer of 2014, 985 MT of import-banned products as well as goods lacking reliable information about their origin have been withdrawn from sale and destroyed.

According to the Rospotrebnadzor, vegetables and fruits accounted for more than half of such products (63%).

In addition, since the commencement of the sanctions, Rospotrebnadzor imposed administrative fines totaling about 866.5 mln rubles ($13.8 mln) on business entities that import and sell products banned for import.

In the summer of 2014, Russia banned imports of a number of food products from the United States, Norway, Australia, Canada and the EU countries in response to anti-Russian sanctions imposed over the situation in Ukraine. Since 2015, the products that have been subject to restrictive measures are destroyed.

Russia’s VAT on Fruit and Berries to be Reduced to 10%

The Government of the Russian Federation will reduce the VAT on fruit down to 10%. Prime Minister Dmitry Medvedev tweeted that he had decided to reduce the VAT on fruit and berries to 10%, as in his opinion, this should lead to lower prices and to the development of the domestic horticultural economy.

The Prime Minister said that the decision on whether to reduce the tax from 20 to 10% was made after a discussion with members of the government and deputies of the State Duma. Medvedev added that on July 10, during a visit to the headquarters of United Russia, it was agreed that the bill would be submitted by deputies to the State Duma.

The head of the Duma faction of United Russia, Sergei Neverov, said earlier that the bill was ready for submission to the Duma. He also said that all factions consider the issue of supporting fruit and berry producers as a priority, as Russian producers are yet unable to supply the volume that would cover the country’s needs.

Amendments are planned to be made to Article 164 of the Tax Code of the Russian Federation.

The preferential VAT rate of 10% applies to a specific list of goods, including meat, meat products, milk, dairy products, eggs, vegetable oils, margarine, sugar, salt, grain, animal feed, bread and bakery products, fish, seafood, baby and diabetic food. From January 1 of the current year, fruits and berries were taxed at a rate of 20%.