The low availability of some fresh produce in Russia’s domestic market is pushing up prices since European, U.S., Canadian, Norwegian and Australian supplies were blocked by the embargo almost one month ago.
Moscow-based RK Marketing/FruitNews director Irina Koziy tells www.freshfruitportal.com how the ban on imported fruit and vegetables has also significantly reduced the amount of apples and pears available to Russian consumers, as well as plums, grapes and berries.
She cites several aspects that have impacted on the Russian availability of certain crops, including the country’s lack of commercial cultivation, seasonal restrictions and the fact that only a small portion and certain varieties of fruit and vegetables on the market can be replaced by local farmers.
“For example, locally grown fresh apples and pears filled less than 20% of the demand of the Russian market,” Koziy says.
“Not only does the recent ban shine some light on the domestic markets’ current unpreparedness, but also how the ban has affected a long list of vegetable and fruit producing countries, which have traditionally supplied about 30% of all fruit supplies on the Russian market.”
Koziy believes the embargo will have a knock-on affect into 2015, particularly for citrus and bananas.
“The restrictions affect different categories of fruit in different ways. It is likely that during the 2014-2015 season banana and citrus imports will increase. With that being said, more than 90% of the bananas in Russia are imported from Ecuador,” she says.
“European products had previously accounted for less than 8% of all citrus imports, as European citrus products had mainly occupied the niche of premium products.
“As a result, it’s expected that bananas and citrus will significantly strengthen position in the low and mid-priced market segments, eventually surpassing the every-increasing cost of apples and pears.”
Sourcing markets to replenish apple and pear supplies
According to Koziy’s estimates on behalf of FruitNews, replacing apple stocks will mean replenishing almost 70% of the supply volume which stands at around 875,000 metric tons, and availability is likely to become more of an issue from next month through March 2015.
She says Russian consumers buy approximately 1.5 million MT of apples per year, importing 1.2 million MT annually with the key exporters Poland accounting for 500,000-700,000MT, around 165,000MT from Moldova and remainder from other European countries.
“Bulk supplies of European apples typically begin in October, beginning just as the season for local produce in Russia has ended.
“Traditionally, starting at the end of March or the beginning of April, fruits shipped from the Southern Hemisphere originate from Argentina (1.1%), Chile (1.6%) and South Africa (0.4%).
“However, even during the peak season for supplies from these countries, which is in May and June, the volume of imports from the Southern Hemisphere has usually been about four to five times less than the volume of apples from Europe during these months.”
Once the Northern Hemisphere season is in full swing, Koziy says the range of potential suppliers will be limited but potential candidates include Serbia (7.5%), China (7.3%) and Azerbaijan (2.8%)
Tough period for stonefruit and kiwifruit
The FruitNews investigation also found the market was lacking around 70-75% of its peaches and nectarines, or around 200,000MT, as well as 50-55% of its kiwifruit supply, or about 45,000MT.
Spain supplied more than half of Russia’s peach and nectarine imports last year, followed by Greece and Italy, but now that European sourcing is out of the picture the market will need to find new supplies. The same three apple-growing countries of Serbia, China and Azerbaijan are also contenders for these fruits, but Turkey looks set to be the major substitute supplier.
The research found 29.8% of all Russian kiwifruit imports came from Greece in 2013-14, while around 17.1% came from Italy. Chile is a key supplier to the market with 17.9% and the South American country is not barred from the Russian market, however it only starts its export deal to Russia in April-May.
“Until the end of winter, the volume of kiwifruit supplies could be coordinated with Iran, but the total volume of kiwis grown by this country was 32,000MT in the 2013-2014 season, and it has already supplied Russia with almost 26,000MT which makes it impossible for a significant increase in kiwifruit shipments,” the FruitNews authors said.
“About 1,500-2,000MT of kiwifruit a year tend to come from New Zealand, but products from this country are much more expensive.
“Long story short: trying to fully replace the shortfalls in domestic production volumes and import options is making it difficult for stores to maintain a variety of fresh fruit following the ban.”
Effects felt at retail
A FruitNews study of grocery stores in August found the number of names and varieties of fruits available to consumers was down 29.5% year-on-year.
“At some stores, the point of sales variety decreased by as much as 46.8%. There was also a substantial 36% decrease in the variety of pears compared to this time last year.
“Kiwifruit also decreased – 32% on the year. Bananas slipped by 32%and stonefruit decreased by 31% on the year.”
While price rises and currency fluctuations had a part to play, price rises for fruit outpaced such rates with the biggest hike seen for kiwifruit at 42.3%, followed by stonefruit (33.3%), grapes (28.5%), bananas (23.3%), citrus fruit (21.6%) and pears (16.7%).