Shipments of apples and pears from South America to Russia, a significant importer of both fruits, are now headed elsewhere.
“Most of the loadings have been on hold since the war broke out. There is a big uncertainty in terms of logistics and financial feasibility of exporting to Russia,” says Fernando Moyano, sales manager Europe and Russia, Salix Fruits.
At this time of the year from the Southern Hemisphere, Argentina and South Africa are the main suppliers of pears to Russia while Chile is shipping apples and Brazil is also shipping fruit. “Russia is one of the larger importers of Argentine pears, representing more than 30 percent of the total exports,” says Moyano.
Fernando Moyano says Russia is one of the larger importers of Argentina pears, representing more 30 percent of the total exports.
Heading to other ports
He says growers and shippers are still determining what to do with the fruit that is on the water. “The alternatives are to divert to other ports in Europe or keep going to Russia ports,” he says. “However it is not clear yet whether the shipping lines will deliver the fruit to Russia and in that case how long it can take. For perishable products it is a huge risk. No new loads directly from Argentina to Russia have been agreed in the last 15 days.”
The same goes for Ukraine. Containers headed to Ukraine have been diverted to other destination ports, though Moyano says no major volume of pears have been loaded in Argentina.
The implications of course are significant. Currently, containers are being diverted into other European ports, largely the Netherlands and Italy. “The ports are operative. However shipping line schedules are affected and it is not clear how long it can take a container to reach Russia and for perishable products, it is a big issue,” he says. “Another big issue is the devaluation and volatility of the ruble affecting the payment chain.”
Currently, containers of fruit are being diverted into other European ports, largely the Netherlands and Italy.
Quality concerns
The shifts also put a spotlight on the quality of fruit. “Russia is a huge market for all fruit sizes and allows a quality that other markets don’t accept. So that will put a lot of pressure all around the fruit business if that quality fruit does not find a home in Russia,” he says. Out of South America, the main varieties of pears are Williams, Packhams and Abate and on apples, Royal Gala, Granny Smith and Red Delicious. This year, the Argentinean crop for apples and pears is shorter than normal given it was affected by frost and hail storms, and quality was also affected. To a lesser degree, Chile is also expecting a lower crop.
All of this puts pricing under pressure. “As the huge devaluation of the ruble turns imported products very expensive, how much can be recovered in the market is a big question mark,” says Moyano. Other markets such as Europe and the Middle East would be affected if there is an oversupply of fruit that doesn't go to Russia.
Looking ahead, Moyano says clear communication from shipping lines about whether they will keep offering their regular services to Russia as well as a stabilization of the quotation of the ruble against the dollar are key factors to give more pre-visibility to all the actors of the fruit business. “Otherwise it is impossible to plan loads in such an erratic environment,” he says.
For more information:
Salix Fruits
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