European fruits may return to Russia

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Russian experts are sent to inspect enterprises in Greece, Hungary and Cyprus

The Kremlin doesn`t exclude the abolition of food embargo against Greece, Cyprus and Hungary

Greek peaches, Cyprian oranges and Hungarian apples may return to the Russian market. The Kremlin doesn`t exclude the abolition of food embargo against three EU countries - Greece, Cyprus and Hungary. The Federal Veterinary and Phytosanitary Monitoring Service (Rosselkhoznadzor) is sending inspectors to these countries. But the prices for fruit are unlikely to decrease.

Next week, Rosselkhoznadzor is sending about 20 inspectors to Greece, Hungary and Cyprus. The purpose of the trip is to check the farms supplying fruits, vegetables and food products to Russia. This is about the exporters who had cooperated with Russian companies before the sanctions against Russia and the Russian embargo were imposed. "Two groups of inspectors will be working in each of these countries. The inspection will last from April 20 to 30," the Assistant Head of Rosselkhoznadzor Alexey Alekseenko said to GAZETA.RU.

The European importers will be checked for the possible lifting of the Russian embargo, says the representative of the agency.

Earlier, Rosselkhoznadzor planned to start inspecting the enterprises in these three countries on April 6, but the agency representatives didn`t set out for the inspection on the appointed day. The visit of the Greek Prime Minister Alexis Tsipras to Moscow pushed the process. Last week, he met with Vladimir Putin and offered to resolve the issue of sanctions. Tsipras is sure that where there is a "political will", there is a solution. Even before his visit to Moscow, Tsipras has repeatedly stated his negative attitude to the EU sanctions. He even called for the EU to lift sanctions.

The Ministry of Economic Development and the Ministry of Finance also spoke about the possibility of lifting the sanctions. Head of the Foreign Affairs Committee of the State Duma Alexey Pushkov also proposed to lift the embargo imposed on these countries, pointing out the fact that they pursued the policy close to that of Russia.

But at the meeting with Tsipras, Putin said that Russia couldn`t make an exception for one country of the European Union and lift embargo against Greece. But there`s a solution to the problem of embargo, Putin believes. Cooperation in agriculture can be expanded, "including through the establishment of joint ventures."

"The issues of establishing joint ventures and easing the embargo are being worked out," said the Ministry of Economic Development to GAZETA.RU. "The issue is on the agenda, the relevant instruction is being prepared," summed up Russian President's press secretary Dmitry Peskov.

By the presidential decree, Russia imposed its embargo on food products from the EU, the USA, Canada and Australia for one year on August 7, 2014. Meat, cheeses, dairy products, fish, fruits and vegetables fell under the prohibition.

Greece is the top supplier of strawberries, oranges, peaches, grapes, kiwi and seafood to the Russian market. Top imports from the Republic of Cyprus are citrus fruit, fresh and cooled fish. Hungary exports apples, meat and meat products mainly, as well as fruit trees seedlings.

According to the Ministry of Economic Development, Russia imported 181 thd. tons of foodstuff and agricultural raw materials from Greece for the sum of $ 325 mln. in 2013. In 2014, the imports from Greece fell to 127 thd. tons and $ 239 mln.

Hungary and Cyprus import even less. According to the estimates by Ilya Prilepsky of the Economic Expert Group, in 2013, Greece amounted to 1% in the total imports of "anti-sanction" goods, Cyprus - 0.1%, Hungary - 0.8%. In 2014, the share of Greece in the total imports of "anti-sanction" goods amounted to 0.8%, Cyprus - 0.05%, Hungary - 0.5%.

This means that the return of imports from these countries won`t have a significant impact on the price formation in Russia. "It is unlikely that the return of imports from the three countries will be able to bring down the high prices for vegetables, fruits and fish that have been set in Russia", says Prilepsky.

Sanctions increased food prices by 1% only, the Central Bank of the Russian Federation previously estimated. But there is another problem: some former exporters might have switched to other markets. "If Russia extends embargo for another year, the European exporters will have to reorient to the markets in other countries, no matter how profitable the Russian market may be for them," says Prilepsky.

Rosselkhoznadzor admits that in case the embargo is lifted fully or even partially, the EU won`t be immediately allowed to export to Russia.

"We'll have to inspect all the suppliers` products again for their compliance with the Russian phytosanitary requirements. A lot could change for one year," says Alekseenko. Even after lifting embargo against such countries as Poland or Lithuania, Latvia, Estonia, they may face problems with importing pork to Russia. More than one year ago, African swine fever was detected in Lithuania, in one of the regions bordering on Belarus. In response, Russia imposed trade restrictions on the export of swine and pork from 28 EU member states, although the disease was localized in the territory of Lithuania.

Part of the Germany production has fallen under the embargo and another part should be carefully examined, especially cheese and dairy products, notes Alekseenko. "We prepare different scenarios concerning the embargo," said the Rosselkhoznadzor representative.

Text by GAZETA.RU

Pictures by RIA Novosti