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China Opens Up Flow of Fruits and Vegetables to Russia   [Copy link] 中文

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Post time 2014-8-12 11:52:05 |Display all floors

Italy counts cost of sanctions as Russia spurns pears, Grana Padano

Rome — Reuters
Published Friday, Aug. 08 2014, 3:01 PM EDT

Russia has sent entire shipments of Grana Padano cheese back to Italy and cancelled exports of pears from Modena under a food import ban which could cost Italy at least €200-million ($270-million U.S.), an agriculture group said on Friday.

Russia’s ban on imports of specific foods from countries that have imposed sanctions over the Ukraine crisis puts at risk exports which were worth about €228-million in 2013, the Coldiretti group said.

“We are facing a worrying escalation of the conflict, with a trade war that confirms that food is strategic above all in times of recession,” Coldiretti president Roberto Moncalvo said in a statement.

On Thursday, Moscow announced a one-year proscription on imports of meat, fish, dairy, fruit and vegetables from the United States, European Union, Canada, Australia and Norway.

Italy, home of Parmesan cheese and Prosecco wine, is proud of its rich culture of cooking, eating and drinking. Coldiretti says food and drink exports made €34-billion in 2013, as the wider Italian economy struggled to emerge from a recession to which it returned in the second quarter of this year.

Italian exports of food and drink to Russia were worth a record €706-million in 2013, Coldiretti said, and rose a further one per cent in the first four months of 2014 despite conflict in the ex-Soviet region.

The ban does not affect alcohol, which should protect the wine and sparkling wine which made up 16 per cent of Italy’s food and drink imports to Russia last year, Coldiretti said.

In 2013, Russia bought Italian fruit and vegetables worth €72-million, meat worth €61-million, dairy products worth €72-million and pasta worth €50-million, Coldiretti said, adding that the possibility of surplus foreign food arriving in Italy could translate into further losses for producers.

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Post time 2014-8-12 11:54:54 |Display all floors

Russian sanctions crushing German business

Published time: August 01, 2014 11:20
Reuters/Tobias SchwarzReuters/Tobias Schwarz

Russia is Europe’s third-largest trading partner, so a spluttering Russian economy, exacerbated by the Ukraine crisis, is seriously affecting German companies. In 2013, Germany exported 36 billion euro worth of goods to Russia.

A higher value ruble and inflation risk consumer spending in the region, and are cutting German involvement in the market accordingly.

German sports retailer Adidas lowered financial targets for the next two years, citing conditions in Russia as a major stumbling block.

READ MORE EU sanctions some of Russia's biggest banks, including #1 Sberbank

“The recent trend change in the Russian ruble as well as increasing risks to consumer sentiment and consumer spending from current tensions in the region point to higher risks to the short-term profitability contribution from Russia/CIS,” the company’s financial outlook said.

In response, Adidas says it will speed-up efforts to close stores in the Russian and CIS markets in 2014 and 2015, as well as reduce inventory in the marketplace.

Adidas soccer cleat RIA Novosti/Aleksandr VilfAdidas soccer cleat RIA Novosti/Aleksandr Vilf

A shrinking car market in Russia is dragging down demand for Renault, Peugeot Citroen, GM, and Ford, which all produce cars locally.

Europe’s largest carmaker, Volkswagen, reported an 8 percent decline in Russian sales in the first two quarters compared to last year, citing emerging market volatility. The company is facing tougher trading conditions in other developing markets such as Brazil, China, and India, where currency fluctuations sway buyers away from European manufacturers.

Inflated currencies in emerging markets dissuade buyers from expensive European imports, and have the potential to strengthen demand for local products.

Long-term, the Russian car market is still expected to expand, fueled by a growing middle class, increased car ownership, and low prices at the gas pump.

Aside from the Russian market, Volkswagen Group reported strong growth, but revenue dropped to €51 billion “due to significant negative exchange rate effects” Wednesday’s press release said.

RIA Novosti/Alexei Kuznecov)RIA Novosti/Alexei Kuznecov)

German-based retailer Metro has about $2 billion invested in Russia, but sales in Eastern Europe collapsed by 14 percent between April and June.

Metro had planned to take its Russian subsidiary Cash & Carry public this year, but has postponed because of the weakening ruble.

Moscow continues to say the sanctions will have a boomerang effect on the US and EU markets. Germany’s finance minister said peace in Ukraine trumps economic interests within the EU.

The Cologne Institute for Economic Research forecasts German exports to Russia could fall by at least 17 percent in 2014, compared to 2013.

In a worst case scenario, if Russia and Germany completely cut bilateral trade, the German GDP could shrink by 0.6 percent, losing €16.4 billion, the Cologne Institute estimates. Exports to Russia from January - April dropped by 14 percent.

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Post time 2014-8-12 11:59:17 |Display all floors

Russia Bans Imports of Romanian Beef as Sanction War Escalates

The Moscow TimesAug. 06 2014 16:20 Last edited 16:20

Alpha / Wikicommons
Russia halted imports of beef and cattle from Romania.
Russia's food sanitation watchdog on Wednesday halted imports of beef and cattle from Romania as the sanction war with the West over the crisis in Ukraine continued to escalate.

The Federal Veterinary and Phytosanitary Inspection Service said in a statement that the ban is due to "an outbreak of spongiform encephalopathy [mad cow disease] in Romania's Cluj county."

The ban will block imports of live Romanian cattle and corollary products, such as bone-in meat, dried blood, and meat and bone meal, as well as meat-based processed proteins used in animal feed.

The ban comes on the heels of the European Union's toughest sanctions yet against Russia over its alleged backing of separatist rebels in eastern Ukraine, which has already seen Russia cut off some imports from the EU.

Russia last week banned most fruit and vegetables imports from Poland, dealing a blow to the Polish economy and raising the price of some products on the domestic market. A spokesman for the food sanitation service said because of poor sanitary controls Russia is considering restricting some or all fruits from the EU, of which Russia imports more than 2 billion euros ($2.7 billion) worth a year.

Ukraine and Moldova have also been subject to a series of bans leading up to and following their signing of association agreements with the European Union.

The import restrictions are not without consequences for Russia. The Russian Central Bank on Tuesday warned that the ban on importing cheap products from abroad could make it harder to control inflation.

"We are particularly concerned that the slowdown in inflation was lower than expected in July," Interfax quoted the regulator as saying. Inflationary pressures usually ease in the summer thanks to the arrival of cheap fruit and vegetables.

The annual inflation rate fell to 7.5 percent in July, but it remains well above the 6.5 percent increase seen in 2013.

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Post time 2014-8-12 12:00:23 |Display all floors

Russia Bans Fruit Imports From Moldova

The Moscow TimesJul. 18 2014 19:42 Last edited 19:43

Denis Abramov / Vedomosti

The temporary prohibitions, which extend to apples, pears, quinces, apricots, cherries, wild cherries, peaches, nectarines, plums and sloe, will take effect on Monday.
Russia imposed a temporary ban on Moldovan fruit imports on Friday, adding to an already existing ban on wine imports from the increasingly Western-leaning country, according to a copy of the order issued by the Federal Veterinary and Phytosanitary Inspection Service.

The temporary prohibitions, which extend to apples, pears, quinces, apricots, cherries, wild cherries, peaches, nectarines, plums and sloe, will take effect on Monday.

The decision was necessitated by "systematic violations of international and Russian phytosanitary requirements," the statement said.

Imports of all plant-products from Moldova in baggage and hand-baggage has also been restricted.

The restrictions follow a series of warnings and similar bans that Russia has placed on Moldovan imports over the past year as the country developed its economic and political relations with the European Union.

The Moldovan parliament ratified an association agreement with the EU earlier this month, immediately inciting warnings from top Russian officials that "protective [trade] measures" would follow.

Russian politicians have said that a free trade zone with the EU, one of the measures included in the agreement, would threaten the Russian market with an overflow of Moldovan imports and even an influx of cheap, re-exported European goods.

Economists, however, have said that the free trade zone poses no actual economic threat to Russia.

First Deputy Prime Minister Igor Shuvalov said after the ratification that Russia could potentially institute tariffs on Moldovan imports.

At present, Moldovan imports are free from customs duties owing to its membership in a free-trade zone that includes Russia and other countries in the Commonwealth of Independent States.

Russia's Economic Development Ministry on Wednesday published a draft bill that would levy a customs duty on meat, fruit, vegetables and wine imported from Moldova. If approved by the government, the bill will go into effect within one month of its signing.

Alexander Slusar, the chairman of Moldovan agricultural union Uniagroprotekt, said previously that a ban on fruit imports to Russia would lead to a collapse of prices on the domestic market, Prime news agency reported.

"Only 10 to 20 percent of producers can reorient their exports to other countries, they will be forced to sell their harvests on the domestic market," he said.

Also with allusions to phytosanitary violations, Russia cut off imports of Moldovan wine in the weeks leading up to a November 2013 summit at which Moldova was expected to sign its association agreement with the EU. Undeterred, Moldova proceeded to sign the agreement.

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Post time 2014-8-12 12:09:38 |Display all floors

Norwegian Fish Caught in Russia's Western Food Sanctions

Salmon and Trout Purveyors Scramble to Find New Buyers; Flood of Fish Expected on Global Markets

Aug. 8, 2014 2:13 p.m. ET

Workers handle harvested salmon at a Norwegian fish farm Thursday. Bloomberg News
Amid the global tug of war over the future of Ukraine, 34 tons of Ola Braanaas's salmon got caught in the middle.

"We have to sell our fish at any price now," the Norwegian salmon exporter, whose biggest customer was Russia, said on Friday. "The fish has to go."

The cascading impact of Moscow's ban on many Western food imports this week may be starkest when it comes to fish.

On Friday, Norwegian fish purveyors, for whom Russia is a key market, scrambled to find new buyers. Chile and the tiny Faroe Islands saw an opportunity to fill the gap in feeding the Russian appetite for salmon and other sea creatures. Shares in a Russian fish production company that until recently was partly owned by a U.S.-sanctioned Russian tycoon soared 19%.

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"We consider the recent Russia events as a 'Black Swan' on the demand side," a fish industry analyst, Kolbjorn Giskeodegard, said in a research note, referring to the financial-markets term for an unexpected and consequential event.

Russian fish consumers, who are already battling climbing grocery and restaurant bills, should gird for higher prices, market-watchers said, while shoppers elsewhere could see discounts.

Russia on Thursday prohibited for one year imports of beef, pork, poultry, fish, fruit, vegetables, cheese, milk and other dairy products from the U.S., Canada, the European Union, Norway and Australia. The move—which is expected to drive up an array of food prices for Russians—came in retaliation for sanctions against Russia's oil, banking, and military sectors, which the EU and U.S. said they enacted to pressure Russia to stop destabilizing Ukraine.

Mr. Braanaas, who sells 70% of his salmon and trout to Russia, had two trucks carrying 17 tons each en route to the border Thursday when the news came that they needed to go elsewhere. He described his scramble to find new buyers for the fresh fish as "acute chaos." In a follow-up interview on Friday, he said he eventually was able to find buyers for all the fish at a slight discount.

One of Norway's largest salmon traders said he had managed to sell off half his stock that had been bound for Russia to European fish processors at a discount. The other half was frozen.

In the EU, authorities in Brussels said they have begun examining whether to compensate farmers hit by Russia's bans on food imports, a move that could help neutralize any backlash against the European sanctions that prompted Moscow's retaliation. Experts from the EU's 28 member states will meet Thursday to discuss preliminary estimates of the ban's potential effect on farmers, though officials said they would probably need more time to decide whether compensation is needed.

The Norwegian Seafood Federation isn't seeking similar compensation. Russia's decision to include in its sanctions the fish industry in Norway, which isn't part of the EU, appeared to surprise many investors. Norway had followed suit after this year's early rounds of European sanctions against Russia and signaled it would do the same with the most recent, toughest EU measures last month. Russian Customs Service data show Norway's fish trade would be among the single hardest-hit sectors by the new sanctions, with more than $1 billion in sales to Russia last year.

In 2013, Norway on average sold 134 truckloads of trout and salmon every week to Russia—its largest foreign market. Shares in Norwegian company Marine Harvest AS MHG.OS +4.33%  A, the world's largest salmon farmer, closed down 11% on the New York Stock Exchange on Friday compared with their Wednesday afternoon close.

"Companies need to turn quickly and find new markets," Are Kvistad of the Norwegian Seafood Federation said. "Large volumes of fish have to be sold."

Russia's sanctions also created some beneficiaries, including fish producers in Chile, Iceland, and the Faroe Islands—a tiny, non-EU country in the Atlantic Ocean between Iceland and Scotland—which would now face less competition on the Russian market.

But even fish producers in those countries will have to contend with a flood of fish on the market that had been destined for Russia.

Mr. Giskeodegard, the fish industry analyst, said shoppers around the world—except in Russia—can expect discounts on salmon in the supermarket, with wholesale prices already down some 10% since last week.

"They are the winners," Mr. Giskeodegard said of global shoppers. "The losers are the Russian consumers. They should expect higher prices."

The ban also benefits domestic Russian fish producers. Shares in one of the market leaders, GK Russkoe More RSEA.MZ -3.89%  OAO, shot up 19% on Friday. Gennady Timchenko, a Russian tycoon who was one of the first well-connected elites in Russia to be sanctioned by the U.S. earlier this year, owned a 30% stake in Russkoe More until recently. The official Itar-Tass news agency reported that he had sold the stake to his son-on-law several weeks ago. The company declined to comment on the effect of the sanctions.

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Post time 2014-8-12 12:15:06 |Display all floors

Sanctions bite-back: Bickering, EU infighting over Russia retaliation

Published time: August 11, 2014 07:51

There is growing dissent in the EU over policies that led to a de fact trade war with Russia. Meanwhile the countries not toeing the line are reaping the benefits, irritating those who jumped on the sanctions bandwagon.

China to start direct sales of fruit and vegetables to Russia

Poland asks US to buy apples banned by Russia

Greek members of the European Parliament demanded Sunday that the EU cancel sanctions against Russia. MEPs Kostantinos Papadakis and Sotiris Zarianopoulos said in a letter to some senior EU officials that Russia’s ban on food import from the EU, which was Moscow’s response to anti-Russian sanctions, was ruinous to Greek agriculture.

“Thousands of small- and middle-sized Greek farms producing fruit and vegetables and selling them primarily to the Russian market have been hit hard now as their unsold products are now rotting at warehouses,” the letter said.

The MEPs are representing the Communist Party of Greece and blame the EU leaders and their own government for supporting what they called “an imperialist intervention by the US, the EU and NATO” in Ukraine at the expense of good relations with Russia.

Greece is one of the EU members hit hardest by the Russian import ban, partially due to its economy still being in turmoil. Greek farmers stand to lose an estimated 200 million euro in direct damages due to Russia’s move, with more long-term consequences expected even if year-long ban is not renewed on expiry. The producers may find it very hard to win back the market share they had before the ban as non-affected countries would certainly weight in.

Head of Austrian Freedom Party (FPOe) Heinz-Christian Strache (Reuters/Heinz-Peter Bader)Head of Austrian Freedom Party (FPOe) Heinz-Christian Strache (Reuters/Heinz-Peter Bader)

Similar sentiments came Sunday from Heinz-Christian Strache, Chairman of the right-wing Freedom Party of Austria, which has 20 percent of seats in the lower chamber of the national parliament and showed similarly strong results in this year’s European parliamentary election.

“In just a few days after the [Russian] sanctions came into force they hurt out agriculture. The EU is thinking on how to mitigate it. Instead of putting Russia on its knees, they drag our farmers to ruin with their senseless sanctions policy,” Strache said ac sited by Austria Presse Agentur.

He also lashed out at Kiev for considering a ban on the transit of Russian gas into Europe to hurt Russia, calling such statements “an affront to their own allies” and “a mockery of the EU,” which will have to save Ukraine from bankruptcy.

He called on the Austrian government to clearly state their policy on the situation.

Who is hit hardest by Russia's trade ban?

Gregor Gysi, a German parliament member from the Left Party, criticized on Sunday the government of Chancellor Angela Merkel for supporting the sanctions policy, which he called “childish.”

“[US President Barack] Obama talks about economic sanctions all the time, but the response hits us, not the US,” the politician said in an interview with ARD television.

“If we isolate Russia, we will have no influence,” he added. “We must learn to talk to each other again.”

Estonian President Toomas Hendrik Ilves (AFP Photo/Ragio Pajula)Estonian President Toomas Hendrik Ilves (AFP Photo/Ragio Pajula)

The irritation with the damage caused by the sanctions confrontation in Europe comes amid anger towards those who chose not to confront Russia and so were not hit back. Estonian President Toomas Hendrik Ilves lashed out at Switzerland for taking a neutral stance in the conflict, which allows its bankers and traders to profit in the Russian market.

"Switzerland must live with the criticism that it has only dispensed with its own sanctions to gain an advantage for its banking sector," the Estonian leader said in an interview with Sonntags Zeitung newspaper published on Sunday.

Switzerland, not being an EU member, is not obliged to enforce all anti-Russian sanctions imposed by the union. It took measures last week to ensure that it does not serve as a route to bypass EU’s sanctions, but declined to impose its own.

Bern cited a need to remain neutral, especially since it is now chairing the Organization for Cooperation and Security in Europe, a key mediator in the Ukrainian crisis.

"The concept of neutrality is for me as empty today as ever before," said Ilves.

The US and its allies have been imposing increasingly tough sanctions against Russia as punishment for its stance in the Ukrainian crisis. They accuse Russia of supporting the armed militia in eastern Ukraine, which is fighting against the Kiev-loyal troops. Moscow accuses the Western countries of hypocrisy, saying they are turning a blind eye to any crimes committed by the Ukrainian regime, which they helped to take over power in the first place.

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Post time 2014-8-12 12:15:47 |Display all floors

Russian Sanctions Dim Greek Hopes for Exit From Recession

By Paul Tugwell and Nikos Chrysoloras  Aug 12, 2014 1:41 AM GMT+0800  

Aug. 11 (Bloomberg) -- Anastasia Amoroso, global market strategist at JPMorgan Funds, discusses how a food ban will impact Russian citizens and food producers in the European Union and United States. She speaks on “Bloomberg Surveillance.”
Greece’s hopes of a 2014 exit from its deepest recession in a half-century may hit a stumbling block after Russia banned European Union food imports in retaliation for sanctions stemming from the insurgency in Ukraine.

“The estimated total cost of Russian counter-sanctions for the Greek economy may look tolerable, but the impact could be quite damaging for industries such as tourism and agriculture amid the fragility of a slowly recovering economy,” said Thanos Dokos, director-general of the Hellenic Foundation for European and Foreign Policy, a Greek think-tank. “It also raises questions about energy security in the coming autumn and winter.”

Russia is Greece’s biggest trading partner, mostly because of gas and oil exports, according to data compiled by Bloomberg. The value of total trade between the two nations reached 9.3 billion euros ($12.5 billion) in 2013, surpassing trade flows between Greece and fellow EU-member Germany.

The recent depreciation of the ruble amid the sanctions and the situation in Ukraine may mean that Greece will see 200,000 fewer Russian tourists this year than originally expected, said Xenophon Petropoulos, director of communications at the Association of Greek Tourism Enterprises, also known as SETE. That could deal a potential 300 million-euro blow to Greece’s biggest industry, based on preliminary estimates.

Photographer: Kostas Tsironis/Bloomberg
Tourists sit in a coffee shop at the foot of the Acropolis hill in Athens.
Russian Tourists

“Arrivals from Ukraine will drop by 50 percent and arrivals from Russia are expected to reach 1.1 million, instead of 1.3 million,” Petropoulos said.

The ruble is the worst performer among 24 currencies of emerging countries tracked by Bloomberg in the last month, with a 5 percent decline against the dollar.

Tourism contributes more than 16 percent to Greek gross domestic product, according to SETE data, and Russia has been the fastest growing source market for visitors to Greece. Tourism revenues from Russia increased 42 percent last year to 1.34 billion euros, according to Bank of Greece data.

The European Commission forecasts the Greek economy will grow by 0.6 percent this year, its first annual expansion since 2007, and by 2.9 percent in 2015. Europe’s most indebted state saw its economic output shrink at the slowest pace in four years in the first quarter when it declined 0.9 percent, a 23rd straight contraction.

Greece’s statistical authority will release second-quarter data on Aug. 13. The economy will shrink 0.5 percent in the three months to June 30 compared with a year earlier, according to the median estimate of seven economists surveyed by Bloomberg News.

Photographer: Kostas Tsironis/Bloomberg
A dock worker for Hellenic Seaways stands on the quay side opposite moored cruise... Read More
Greek Agriculture

The hit from Russian sanctions on Greek agricultural exports is more difficult to estimate as it will go beyond the direct value of sales, said Georgios Polyhronakis, spokesman for the Association of Greek Export and Consignment Enterprises for Fruit, Vegetables and Juices.

“The biggest impact from the Russian embargo will be from the indirect fallout as Russia’s ban on EU fruit and vegetables means that large quantities of fresh produce suddenly become available, swamping the market,” he said. This will “send prices falling across Europe, hitting both the volume and value of Greek exports towards other countries,” Polyhronakis said.

While the Russian market is a very important destination for Greek agricultural products, the turnover in absolute numbers is limited and manageable, the Greek Foreign Ministry said Aug. 9. Agricultural products account for 41 percent of total Greek exports to Russia, and are worth around 200 million euros a year, according to the Panhellenic Exporters Association.

Strawberry Output

Russia doesn’t figure in the top 15 export destinations for Greek products. Even so, the country absorbs about one quarter of Greek peach production and one half of strawberry output. Exports to Russia fell 26.1 percent in the first four months of the year to 84.9 million euros, or 1 percent of total exports, according to the association.

Greece’s government has asked the EU to protect both Greek and European products, the Finance Ministry said after a crisis meeting today. Damage assessment for Greek exporters will begin immediately, as efforts to mobilize EU crisis-response funds are under way, the ministry said, adding that the government’s goal is to supplement such funds with other tools, including national means.

Greece aims to keep exports at 27 billion euros, or 15 percent of gross domestic product, in 2014, Deputy Growth and Competitiveness Minister Notis Mitarakis said Aug. 6.

Compensations drawn from the country’s budget would further weigh on public finances as Greece tries to sustain a surplus before debt servicing costs in order to bring down public debt. Still, the government may not have a choice: If all efforts to offset the cost of sanctions fail, farmers will be reimbursed, according to a Foreign Ministry statement on Saturday.

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