France debates lifting sanctions

This week French parliament will debate about lifting the sanctions. The centre-right party took the initiative for this debate. Prices for fruit have risen sharply since the boycott. Russia allows import of German seeds. The country also lowers import tariffs for a number of products that cannot be cultivated in the Russian climate. Ukraine hopes for preferential treatment from the EU to compensate the loss of the Russian market.

For the forthcoming May holidays, many Russians are still looking for a holiday destination. After the ban on travel to Egypt because of the downed plane over the Sinai last year, and the ban on travel to Turkey because of the downing of a Russian fighter plane, Russians are now going to Greece. According to reports, the Greek embassy has already received 10,000 visa applications, culminating when 2,600 Russians wanted to apply for a visa last Friday.

This week the French parliament will tackle whether sanctions against Russia need to be extended or not. The initiative for the debate comes from the centre-right party. It is the first time parliamentarians will speak out on the sanctions. The initiator of the debate opposes the measures. Thierry Mariani says the sanctions have only caused damages to France.

According to Rosstat prices for fruit in Russia have risen by 59.2 per cent since the boycott. Between July 2014 and March 2016, when the sanctions were imposed, fruit prices have risen by nearly 60 per cent. Prices for vegetables and frozen fish have also risen. The largest increase in prices was registered during the first months after the boycott was introduced. Prices have stabilised for now. 

The Russian phytosanitary Service has allowed the import of German seeds. The consent was preceded by inspections and laboratory research. Companies allowed to export seeds are: Bruns Pflanzen Export GmbH & Co.KG. and H. Lorberg Baumschulerzeugnisse GmbH & Co.KG.

According to Russian media, the country will lower the import tariffs for pistachios and dried fruit to a zero-tariff. At the end of May, import levies on broccoli, cauliflower and sprouts will also be lowered. Cultivation of these vegetables is difficult in the Russian climate. The main trade partners for dried fruit are Tadzhikistan, Uzbekistan, Iran, Turkey, Chile and Argentina.

The strawberry harvest in Stavropol, southern Russia, might double to 200 tonnes. Last year 100 tonnes of strawberries were picked. If the weather remains favourable, the harvest could be even higher. Cultivators are growing about 20 different, domestic varieties in the fields. The region invests 4 million rouble in the cultivation, twice as much as last year.

While global demand for organic products is growing, demand in Russia is stagnating. The volume of organic products came to 10,800 tonnes in Russia. This is comparable with the volume of 2014. That year demand for organic products rose by 4.9 per cent. Despite the trend in healthy food, demand for organic products is stagnating.

During his speech for the Duma, Prime Minister Medvedev said the government will continue to invest in the agricultural sector. The sector shows a stable growth, estimated at three per cent this year. “Everywhere in the world, in successful and less successful countries, government support for agriculture exists. Without a doubt, we will continue with it,” according to the Prime Minister.

Earlier, the Russian Central Bank announced that prices for fruits and vegetables have decreased. According to merchants in the far east of Russia, the lower prices have nothing to do with self-sufficiency or import substitutions. According to them the usual seasonal changes are driving down prices.

The Russian conglomerate Gavrish will invest 200 million rouble in a greenhouse complex in Krasnodar. The complex is intended for the production of seeds. Due to the exchange rate, the import of seeds is no longer cost-effective. The production of good-quality seeds will take two to three years. According to government figures, 82 per cent of vegetables are cultivated from imported seeds.

The Ukrainian government is hoping the country will receive preferential treatment from the EU now that the country has lost the Russian market. The country hopes to compensate the loss with it. That is why Ukraine hopes that import tariffs for more products will be lowered. The country also hopes quotas will be increased. Quotas have already been used for several products.

Morocco profits the most from the Russian boycott of Turkish fruits and vegetables, according to Russian media. According to reports, the North African country is the most important supplier of tomatoes and oranges. The country supposedly has a market share of 55.6 per cent in citrus, 30.2 per cent in vegetables and 25.7 per cent specifically in tomatoes.

Russia’s plan to replace import with its own cultivation does not appear to work well. Especially for tomatoes and cucumbers this proves difficult. Last year’s plans to increase greenhouse cultivation were only half realised. If 2,000 hectares of greenhouses are not built before 2020, the country will have to return to import. According to figures, the harvest increased by five per cent last year, while import decreased by 30 per cent. The cultivation companies usually do not have enough capital to invest in building greenhouses. Additionally, due to the unfavourable exchange rate, costs for greenhouse cultivators have risen to 64 per cent.