Rising oil prices and the strengthening of the Russian ruble (if one may call it that after the collapse of 2014–2015) in 2017 played a positive role in the Russian market of fruit and vegetables in terms of imported supplies. In the first 11 months of 2017, imports of fresh vegetables amounted to 2.3 million tons, which is 54% higher than the indicator of the similar period of 2016, when 1.5 million tons of produce were imported. In monetary terms, vegetable imports equalled $1.4 billion, having increased by 28% to January–November, 2016. Imports of fresh fruit grew by 14% in physical terms and amounted to 4.7 million tons; growth in monetary terms equalled 20%, and imports reached $3.7 billion.
In the structure of fresh vegetable imports during the time period examined, the share of potatoes increased from 19% to 34%. During the first 11 months of 2017, 798 thousand tons of potatoes (+182% to the similar period of the previous year) were imported into Russia. At the same time, Russia’s gross potato harvest declined by 5%, according to official data.
The top segments having demonstrated substantial growth also included onions and garlic (+96% to January–November, 2016), and cabbage (+56% to January–November, 2016). In physical terms, the volume of onion and garlic imports amounted to 364 thousand tons in January–November, 2017 (against 186 thousand tons a year earlier), whereas imports of cabbage reached 141 thousand tons (against 91 thousand tons). Supplies of other types of vegetables demonstrated less impressive results, and growth was as follows: tomatoes – +8%; root vegetables – +19%; cucumbers – +9%.
The distribution in the structure of supplies in monetary terms is similar: potato imports demonstrated an increase by 104%, cabbage imports grew by 51%, and imports of onions and garlic increased by 60%.
The key country supplying Russia with imported vegetables was Belarus – in the first 11 months of 2017, its share in imports in physical and monetary terms was 23 and 10% respectively. This was achieved through supplies of potatoes, root vegetables, and cabbage, as well and the transit of ‘forbidden’ vegetables.
Belarus is followed by China, which is part of the top three countries in imports of virtually all segments – potatoes, tomatoes, onions and garlic, root vegetables, cabbage, and cucumbers.
The third position is occupied by Egypt (due to supplies of potatoes, onions and garlic) and Azerbaijan (traditionally importing tomatoes). Morocco supplies tomatoes to Russia, Israel imports root vegetables, whereas Iran imports cabbage and cucumbers.
Let us examine the ratio of imports to domestic harvest of fresh vegetables in Russia. Last year, gross potato harvest in the country amounted to 29.6 million tons, which, as has been mentioned above, is 5% lower than the level of 2016 (31.1 million tons). Gross harvest of other types of vegetables reached 16.3 million tons, which is almost equal to the indicator of the previous year.
The share of imported potatoes does not exceed 3–5%, whereas the share of imports of other vegetables is not higher than 10% total (separately: cucumbers – 5%; tomatoes – 13%; cabbage – 4%; root vegetables – 7%; onions and garlic – 14%).
Imports of fresh fruit into the Russian Federation in January–November 2017 increased through supplies of bananas (+14% in physical terms to the level of the similar period of the previous year), grapes (+79%), apricots (+57%), and the ‘other citrus fruit’ category: lemons, clementines, pomelos (+79%). Imports of tangerines dropped by 33%, whereas supplies of oranges declined by 10%.
Less significant growth was observed in imports of apples and pears, and equalled 4 and 10% respectively.
The largest share in the structure of imports is occupied by bananas – they account for 30 and 28% of supplies in volume and value terms respectively. They are followed by citrus fruit with the shares of 24 and 25% respectively, and apples – 13 and 10%.
Ecuador was Russia’s key fruit supplier in the first 11 months of 2017, accounting for 29 and 27% of imports in physical and monetary terms respectively. The country maintained its leadership due to banana imports. It is followed by Turkey with the shares of 14 and 16% respectively, achieved through imports of tangerines, oranges, other citrus fruit, grapes, cherries and sweet cherries, and apricots. Belarus is third in imports – its share equalled 6% in physical terms. Russian consumers have long become accustomed to Belarussian pears, peaches, and strawberry, along with Belarussian shrimps and the like.
During the first 11 months of 2017, China occupied 6% of imports in both volume and value terms. The country supplies apples, tangerines, pomelos, pears and peaches to the Russian Federation. Similar shares belong to Moldova (apples) and Egypt (oranges).
According to official statistics, prices for vegetables changed as follows in 2017: potatoes – +23% on average; onions – +11%; cucumbers – +2%; carrots – -2%; tomatoes – -4%; beets – -5%; garlic – -12%.
The average price for oranges remained at the level of 2016. Prices decreased for bananas – by 12%; for grapes – by 7%; and for pears – by 3%; whereas the price for apples rose by 8%.
Further development of the Russian fruit and vegetable market will depend upon two factors: the first one, which is positive, is the recovery of oil prices and the strengthening of the ruble; the second one is negative and implies Russians’ declining real incomes. In the monthly dynamics (in terms of percentage against the previous month), a slight deceleration has been taking place – however, in comparison to the similar period of the previous year, the decline is ongoing. This indicates that the peak of the decline is over, although the decline itself has continued at a slower rate.
A short-term positive effect will be achieved by the pre-election indexation of pensions and state employee salaries, as well as salary supplements to state employees. Sadly, the inflationary spiral is still in place – 2018 started with an increase in fuel excise duties. This means that the logistical component will grow once more, followed by the others.
Therefore, in the foreseeable future, prices will serve as the single key factor in product choice to the majority of the Russian population.