Putin: Import Substitution in Russia is Temporary Phenomenon

The import substitution in Russia is a temporary phenomenon, a temporary tool for adjusting the current situation, President Vladimir Putin said on Wednesday.

“The idea of import substitution itself is not universal and is not what we should strive for in the long run, because import substitution should not undermine competition. This is an extremely important thing,” Putin said at a meeting with women entrepreneurs.

“We should understand, that all this import substitution is a temporary phenomenon. I want you to understand this. This is a temporary tool to adjust to the current situation,” he stressed.

“We should aim at producing such products of such quality and at such a price that it is competitive not on our own, but on the world market,” Putin added.

According to him, import substitution is primarily related to ensuring the security of the country, for example, in the defense industry. As an example Putin mentioned the fact that Russia has begun to produce marine engines, engines for helicopters, and this is being done compulsorily.

“In some cases we did it and are doing it to support the domestic producer in difficult economic conditions, especially in the situation when our partners violate and distort competition by imposing different sanctions, which are politically motivated, as they claim, but in fact are based on the ambition to gain an advantage,” he added.


Russian Apple Production is a Long Way From Self Sufficiency

Despite efforts to become self-sufficient in apple production after the embargo, recent figures confirm that the country is far from being able to produce enough apples to meet domestic consumption.

According to the Ministry of Health, the average Russian consumes 50 kg of apples per year, yet, according to AB-Center, recent total production would only amounts to 5.8 kg per year per consumer. This amount includes all apples, including those for processing, so when it comes to the amount of apples for fresh consumption, the amount per person would fall even lower.

Although it seems like self-sufficiency is far from a reality, Rosstat has estimated that the total production of top fruits, a majority of these being apples, did grow by 15% in 2016. In addition, independent experts have reported that the share of imported products on shelves has, for the first time in many years, given way to Russian apples.

Although apple imports have decreased since the embargo, a recent report from UN Comtrade said that Russia is still number 3 on the list of largest apple importers in the world in 2016, with a share of 6%, totalling 678,600 mt of fresh apples. This amount had already reached 622,200 mt in the first 11 months of 2017.

In the first half of 2017, the majority of apple imports were coming in from Serbia and Moldova, with 32.1% and 26.2%, respectively. Other major suppliers include China, Belarus, Chile, Azerbaijan, South Africa and New Zealand. Bosnia and Herzegovina had also been a significant apple importer to Russia, but this is currently on hold after Rosselkhoznadzor placed a ban on the country following suspicions that they were exporting apples from Poland as their own.


Russia Approves State Qid to Fruit and Veg Processors

Russian Prime Minister Dmitry Medvedev has signed a decree which approves the list of agricultural products that will benefit from state aid granted to organizations involved in their processing. This was reported by the press service of the Russian government.

According to the document, the list includes, in particular, processed and preserved fruit and vegetables and other agricultural products.

“The approval of the list will allow the state to provide support in the development of agriculture, increasing the availability of credit resources for organizations and individual entrepreneurs devoted to the processing of agricultural products,” said the document.

Also, the report says that state support will be exclusively provided to organizations for which the sale of these products generates at least 70% of their annual income.


Russia to buy $2.5B of Filipino agri produce

Officials report that during bilateral discussions between President Duterte and Vladimir Putin, Russia committed to buy up to a staggering $2.5 billion worth of fruit, grains and vegetable from the Philippines.

Trade Secretary Ramon Lopez said the Russian side agreed “immediately” to a proposal for the importation of Philippine fruit and other agricultural products in the next 12 months.

“Their immediate estimate is $2.5 billion. That’s a number they [the Russian side] quoted,” the Cabinet official told Filipino journalists covering the Asia-Pacific Economic Cooperation (Apec) Leaders Meeting in Peru’s capital.

This dwarfs the $46 million worth of exports the Philippines currently ships to Russia every year, he said.

“We were talking of what they could buy from us, especially agricultural products, but nothing was specified. But I understand we supply them with a huge quantity of bananas… and mangoes. With these kinds of discussions, these present more trading opportunities between us,” Lopez said.

Lopez said Putin also offered to help the Philippines through investments in energy and infrastructure.


Russia aims to import only citrus and exotics by 2020

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.


Russian ministry invests in agriculture

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.


Russia to increase Sri Lankan tropical fruit imports

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.


Russia will import more fruits and vegetables from Latin America

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.


Finnish businessman develops processing wild berries in Northern Russia

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.


Russia’s Central Bank declares shortage of banned food items

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.