Russia to Extend Preferential Trade Regime with Moldova, Says Dodon

 Starting from July 1, Moldovan exports of fruits, vegetables, preserved food and wine products to Russia will be exempt from customs duties, according to the republic’s President Igor Dodon. Russian authorities have agreed to extend duty-free treatment for Moldovan exporters, as well as to provide additional privileges for transport companies, the republic’s President Igor Dodon said following a meeting with Deputy Chief of Staff of the Russian President’s Executive Office, Special Presidential Representative for the Development of Trade and Economic Relations with Moldova Dmitry Kozak in Moscow on Thursday.

“Russia agreed to extend preferences on duty-free supplies of Moldovan goods, which means that starting July 1 of this year Moldovan fruits, vegetables, preserved food and wine products will be supplied to the Russian market free of customs duties, which will enable Moldovan producers to save at least 20-25 mln euro per year,” Dodon wrote on his Facebook page.

Russia will also consider the possibility of providing assistance in the form of diesel fuel to agriculture producers affected by the drought this year, he added.


McCain Plans to Open French Fry Production Plant in Tula Region

McCain is set to begin the construction of its first plant for the production of French fries in the Russian Federation. In June McCain Foods Holland B.V. & McCain Europa BV established McCain Foods Rus LLC in the city of Uzlovaya, Tula Region, whose activities include the production of finished products and dishes, and the processing of potatoes.

A source in the market confirmed that McCain working on a project of a plant for the production of French fries, which is supposed to be placed in the SEZ “Uzlovaya”. Among the conditions for investors are zero import duty and VAT rate until 2065, and the first ten years, the income tax rate is 2%. In the European office McCain prompt comment was not provided. The Development Corporation of the Tula region said that they could not yet disclose information about the project.

Russia’s Greenhouse Vegetable Production Grows by 24%

According to the operational data of the regional agro-industrial complex management bodies, as of June 10, 2020, 604,600 MT of vegetables were harvested in winter greenhouses, which is 24% more than in the same period of 2019 (487,500 MT). Out of that, greenhouse cucumbers account for 406,200 MT (+22.5%) and tomatoes for 188,000 MT (+26.9%).

Traditionally, the Lipetsk, Moscow, Volgograd, Kaluga, Stavropol, and Krasnodar regions are leaders in the protected cultivation of vegetables.

The Russian Ministry of Agriculture is systematically working to improve state support and regulations for the agricultural market in order to increase the country’s agricultural production, meet its domestic needs, and develop its export potential.

IMF: Russia’s GDP Will Decrease by 5.5%

The International Monetary Fund (IMF) predicts a drop in Russia’s GDP by 5.5% in 2020, according to the April report on the global economy.

In general, the global economy will shrink sharply by 3% this year. This decline will be significantly higher than in 2009 when the world economy shrank by 0.1%. In 2009, Russia’s GDP fell by 7.9%.

Imports of Turkish Greenhouse Vegetables Rose to 29,300 MT in the beginning of 2020

The volume of supplies of greenhouse vegetables from Turkey to the Russian market amounted to 29,300 MT, worth $28 million, in the beginning of 2020.

According to ROIF Expert agency, that due to the sharp increase in supplies, Turkish companies have surpassed the largest exporters of this product category – Azerbaijan and China.

As of the agency report “Condition and analysis of the greenhouse industry in Russia: research and forecast until 2024”, the import of Turkish vegetables has grown by 20 times in 2016-2019. Last year, Turkey increased the sales of greenhouse vegetables to the Russian market by $66.2 million.

Turkish exporters increased their presence on the Russian market despite a 5.3% overall decline in imports in this category in volume terms in 2019. Meanwhile, the Russian producers of greenhouse vegetables increased the production volumes by 471,500 MT, with an increase of greenhouse areas by 36.9%, in 2016-2019.

Experts Predict Reduction of Fruit Yield in Russia

According to the director of the Fruit and Vegetable Union, Mikhail Glushkov, in 2020, Russian fruit producers will lose about 20% of the production due to frost.

“Russia’s fruit production volume in Russia this year will be significantly lower than in the past. Firstly, due to an excessively warm winter, the number of orchards affected by pests and diseases will be greater than in the past. Secondly, in the main horticultural regions – Stavropol and Krasnodar Krai – late frosts were recorded, with crop losses that could reach 30-40%. These circumstances will negatively affect not only the size of the production, but also its quality. “Some of the fruits may be in poor condition,” said Tamara Reshetnikova, general manager of Rostov Technologies.

According to estimates of regional associations in the territories of the South and North Caucasus Federal Districts, about 80% of the apple and pear productions and 85% of the cherries, plums, apricots and peaches were destroyed. There, the air temperature dropped to -11 °C.

“The consumer demand for all types of fruits has already been reduced both in terms of volume and value, and this trend will continue by the end of the year. For this reason, we do not expect a strong jump in fruit prices, despite the fact that producer costs are increasing due to ruble devaluations,” said Tamara Reshetnikova.

She believes that despite the expected low yield of apples and other fruits grown in Russia (peaches, apricots and cherries), foreign suppliers will not increase the import of their products into the territory of the Russian Federation, as Russian consumers will not be able to buy them due to their lower incomes. Besides, countries in Western Europe are experiencing a shortage of seasonal workers for the harvest due to the closure of borders to prevent the spread of the coronavirus. Abroad, the demand for fruits and berries has also been reduced. Tamara Reshetnikova doubts that Russian fruit importers will look for new suppliers, for example, Australian or South American.

“The main question is not where to get imported products, but how to stimulate consumers to buy fruits and berries, and this can only be done without raising prices for them,” she added.

Russia Expects a Record Vegetable Production in 2020

389,300 mt of vegetables have been harvested in greenhouses in Russia up until April 28, 2020, which is 29.4% more than in the same period of 2019. Specifically, the greenhouse cucumber harvest amounted to 274,600 tons (+30%), and that of tomatoes stood at 107,600 tons (+30%).

This year, the Russian Ministry of Agriculture expects a record production of greenhouse vegetables that could reach at least 1.25 million tons; 9.6% more than in 2019. This growth is due to investments made in the modernization of greenhouses and in the construction of new ones, according to the director of the National Union of Fruit and Vegetable Producers, Mikhail Glushkov. In the last five years, more than 1,100 hectares of greenhouses have been built in the country.

Russia’s objective is to become self-sufficient in the supply of vegetables. At the moment, it is already able to meet 90% of the cucumber demand and 60% of the tomato one. Meanwhile, the veto on European fruit and vegetable productions, introduced in August 2014, is still in force.

Russia Consolidates its Position as the Main Destination for Argentine Pears

Argentine pear and apple exports experienced a significant increase during the first quarter of 2020, as they grew by 30% and 22% respectively, according to data published by the Nation’s Ministry of Agriculture, Livestock, and Fisheries.

In this period, Russia established itself as the main destination for pears after it imported between January and March more than half of the 81,031 MT it imported throughout all of 2019. As reported by the Ministry in a statement, “shipments of pears to that destination reached 44,867 MT and were worth more than 31 million dollars; which places Russia as the main market for Argentine pears, concentrating 30% of exports.”

Meanwhile, apple exports stood at 3,245 MT of apples worth more than $2 million, i.e. 22% higher than in the same period in 2019.

The Ministry also highlighted that Argentine fruits were benefiting from a 25% tariff reduction granted by the Eurasian Economic Union (UEE), which is formed by the Russian Federation, the Republics of Armenia, Belarus, Kazakhstan, and Kyrgyzstan.

Rosstat Reports Sharp Rise of Fruit and Veg Prices in Russia

Rosstat reports that over the past month, lemon prices in Russia have become 2.5 times higher. According to experts, this was due to rumors that the fruit supposedly helped protect you against the coronavirus. Other fruits and vegetables also recorded significant increases in April.

Statistics show, in that month, the price of onions rose by 49.9%; garlic became 25.7% more expensive; the cost of cabbage and carrots increased by 17.1%; potatoes saw their price rise by 16%, and that of beets by 10.7%. Apples went up by 8.8% and oranges, by 8.4%. At the same time, the cost of cucumbers fell by 20.6%, and that of tomatoes, by 10.3%.

Experts believe that the increase in fruit and vegetable prices is clearly linked to an increase in the cost of products in general.

Turkey: Mandarin Exports to Russia Increased by 49%

In the first quarter, Turkey’s mandarin exports to Russia increased by 49% in terms of value and 37% in terms of quantity.

According to the Eastern Black Sea Exporters Association (DKIB), in the same period, Turkey exported 81 776 MT of mandarins to Russia and earned 49.8 million USD. Last year, Turkey exported 59 725 MT of mandarins in exchange of 33.5 million USD.

Trabzon, a city in the Black Sea Region, was the only mandarin exporter from the region. In this period, the city exported 14 638 MT of mandarins and earned 9 million USD.

The association’s (DKIB) vice-chairman Ahmet Hamdi Gurdogan announced that the 2019-2020 citrus season is going well and that they work towards the next season.

Pointing out to the coronavirus pandemic and its impact on global trade, Gurdogan stated that export costs are constantly increasing. “It is important to lower export costs. State support is crucial to achieve a competitive position in the market. Our exporters’s expectations are in the same line”.