SIDE EFFECTS OF THE RUSSIAN VETO

Category: MARKETS
Published on Tuesday, 28 October 2014 16:36
Written by José Alberto Gutiérrez Gutiérrez
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From Lithuania to Spain, fruits and vegetables are being stored and prices are plummeting, with EU farmers losing almost a third of its market.

 

 

Six weeks after Moscow responded to the EU sanctions against banks and Russian companies, banning all imports of fresh produce from Europe, producers of fruit and vegetables all over the continent are starting to feel the effects.

 

 

  

AFFECTED COUNTRIES BY THE RUSSIAN VETO

 

This is the list of the most affected countries by the Russian decision, according to Brussels:

 

 

Lithuania: 927 million

Poland: 841 million

Germany: 595 million

Netherlands: 528 million

Denmark: 377 million

Spain: 338 million

France: 244 million

Italy: 163 million

UK: 40 million

Bulgaria: 10 million

Slovenia: 10 million

Croatia: 7 million

Slovakia: 6 million

Luxembourg: 5 million

Romania: 1 million

 

Spain

 

Spain, sixth on the list, is one of the countries more affected by the Russian veto and will receive EU support for that, but it will not serve to compensate damaged and losses.

 

The income growers and farmers receive each year from sales to Russia amounted to 5,000 million euros, so that EU aid will serve to cover just 6.3% of the losses. Moreover, the Regulation on compensation and aid approved by the European Commission not include products like lettuce, lemon, aubergine or courgette reason why differents Spanish organizations of the sector like COAG Almería amongst other will press to get these products included in the list.

 

Poland

 

Poland announced a much higher production of apples than actually produces in early September. Because of this irregularity, EU aid was delayed from the 4th to 30th of September affecting negatively the rest of members and the image of the European Union.

 

Polish apples are among the most affected products. According to the Polish Union Fruit, prices have fallen so much that farmers, if they could sell, would only be able to cover their costs. The result of this is thousands of tons of cheap Polish apples flooding the markets of Western Europe which is also beginning to damage the French producers.

 

Netherlands

 

Prices of some products have already been reduced by 75-80%, and hundreds of trucks were turned back. Dutch Producers are afraid of eggplants, peppers, tomatoes and cucumbers prices will fall down within months, while some 900 hectares of orchards Dutch - in particular pears - can be left unharvested because of the selling prices do not cover the cost of harvesting.

 

Lithuania

 

The small Baltic state is the second largest exporter of fresh fruit and nuts to Russia after Poland in the EU, with exports of € 309 million in 2013, and the largest exporter of fresh vegetables, worth € 340 million. Potato producers in Lithuania are particularly affected; about a third of the total harvest is generally sold in the Russian markets.

 

Germany

 

In 2013, Germany exported agricultural and food products worth over 1.6 billion euros to Russia. Russia banned "all imports of meat, fish, fruits, vegetables and milk products" on August 6, 2014 and German exports  will be affected  worth over 633 million euros.

 

Denmark

 

It is estimated that Denmark will  lose about 377 million euros. This country exports to Russia dairy products, eggs, honey, meat, fish and seafood.

 

FAVOURED COUNTRIES BY THE RUSSIAN VETO

 

Belarus, Uzbekistan, Turkey, Chile, Ecuador, Brazil, Uruguay, Argentina and Morocco will be the main countries benefited from the Russian veto. For these countries this is a unique opportunity to satisfy the Russian demand for food, fruit and vegetables after the recent prohibition of the Moscow Government to import food and raw materials from the Unites States and the European Union.

 

Undoubtedly, these countries will do everything what is necessary for increasing their exports and meet the demand of the Russian market.

 

This occasion comes at the right moment specially for Morocco so that I have been investigating to get to know a little bit more about the agriculture in this country.

 

The fruit and vegetable  sector in Morocco

 

There almost everything is ground, land 60-70%. The structures for tomato are higher than the ones in the Iberian Peninsula. But what surprises me most about the Moroccan tomato is the long period of production of their crops. They start growing tomatoes between the 10th and 25th of August and harvest them until early June, almost the whole year.

 

Watermelon is not exported. Crimson is the variety most cultivated and seeded (traditional watermelons for the local market). About melon, it is exported only the earliest (yellow and Galia) when prices are good. Apart from that there are foreign companies, for example French which export Charentais melon.

 

With regard to the pepper, the types exported are Kappya and Californian tricolor. It is also grown, but for local consumption, Italian, Spicy and a variant from Lamuyo, but smaller and shorter.

 

The long cucumber is not exported so much; however, other short black cucumber shipments are made to Russia. French cucumber is produced for domestic consumption.

 

Furthermore, Morocco is carrying out innovations in order to improve their production process, so the Moroccan government wants to implement a desalination plant in Agadir. Besides, they are also testing the heating and there are projects to heat during the month of December.

 

CONCLUSION

 

In conclusion, although their technological advances are very far away from countries like Netherlands where creativity, innovation and strategic vision of continue growth are impressive and their products cannot be compared with the quality of the Spanish fresh produce, there is no doubt this is the best opportunity for these countries all over the world to increase their exports, penetrate the Russian market and give a boost to the economy of the country.

 

From Infovegetables.com, we like to know your opinion.

 

Additional information:

http://joseantonioarcos.wordpress.com/2014/09/18/marruecos-a-traves-de-los-ojos-de-un-marroqui/

http://www.huffingtonpost.es/2014/08/07/importaciones-rusia-espana_n_5658702.html

http://actualidad.rt.com/economia/view/136365-paises-ue-afectados-sanciones-rusia

http://www.theguardian.com/world/shortcuts/2014/sep/21/russia-ban-eu-fresh-produce-farmers-count-cost

http://www.abc.es/economia/20140817/abci-consecuencias-veto-rusia-201408162102.html

http://www.thelocal.dk/20140807/russia-import-ban-could-cost-denmark-billions