The main factor having influenced Russia’s domestic market for nuts in the past few years is the implementation of protectionist policies in food trade as well as sanctions against a number of countries. The list of banned products includes all nut varieties, with the exception of peanuts. The respective Decree of the Government of the Russian Federation was adopted in early August 2014 and fundamentally changed the structure of nut imports, affecting volumes of supplies to the country.
Total volume of nut imports in 2017 increased by 5% compared with 2013. Said growth was achieved through demand shifting towards peanuts and its imports rising by 45% over the last 5 years. Imports of other nut varieties, on the contrary, plummeted by 42% during the time period in question. However, growth by one third in import indicators of other nuts was observed in 2017 compared with 2016, dynamics remaining positive across all segments. In the first three quarters of 2018, total nut imports into Russia increased by another 5.2%.
In terms of import structure by type, peanuts have been clearly dominant. In 2013, before the protectionist measures were taken, peanuts, classified as legumes, were occupying a bit more than half in imports. In 2017, however, they already made up 75% in supplies.
Naturally, the structure and volume of nut imports are largely affected by prices of products imported. For instance, the average price per tonne of imported Argentinian peanuts amounted to $ 1.52 thousand in 2013, whereas in 2017 it equaled $ 1.48 thousand. Almonds produced in the US, the leader of the segment in 2013, on the other hand, cost $ 5.36 thousand; in 2017, 62% of supplies of almonds in physical terms were provided by China, the average price per tonne of this nut variety amounting to $ 12.78 thousand.
Before the sanctions were imposed, the United States used to be leading in imports of nuts into Russia. According to estimates by “ID-Marketing”, the US accounted for 29.5% of imports in physical terms in 2013. In the structure of nut imports from the US, 48% were made up by almonds.
During the past 5 years, imports of almonds dropped from 25.2 thousand tonnes in 2013 to 6.1 thousand tonnes in 2017 under the impact of sanctions; growth in indicators in 2017 equaled 72% to 2016. During the first 9 months of 2018, imports of almonds into Russia amounted to 6.8 thousand tonnes (+83.3% to January–September 2017). Growth in indicators was achieved through imports having increased by a factor of 2.4 from China, by 52.5% from Turkey, and by 58% from Chile.
In the peanut segment, in 2013 the US were second in supply volumes (22% of the total volume of peanut imports in physical terms), following Argentina leading with the share of 51%.
In 2017, Brazil occupied the first position in volumes of peanut imports into Russia, having increased its presence in the segment almost by a factor of 5 compared with 2013. It should be noted that Brazil ranked fourth in global export in 2017. Volumes of Brazilian peanut supplies to the global market grew by 90% throughout 2013–2017.
The second largest peanut importer into Russia in 2017 was India: over the 5 years, volumes of supply from this country increased from 439 tonnes to 35.8 thousand tonnes. However, it is important to note that, in 2016, a decline in supplies of Indian peanuts against 2015 occurred, resulting in a reduction from 11.8 thousand tonnes to 3.6 thousand tonnes.
Argentina was third in volumes of peanut imports into Russia in 2017. Compared with 2016, its supply volumes dropped by 45.5%.
In January–September 2018, Brazil was conquering the Russian market further: imports of Brazilian peanuts into Russia rocketed 86% to the similar period of 2017, whereas imports from Argentina and India declined by 27 and 67% respectively.
The segment of coconuts is one of the few that were not affected dramatically by the sanctions. The Philippines have been leading in coconut import into Russia during the recent years analyzed: in 2017, this country accounted for 46% of imports. Indonesia ranked second, its produce making up 36% in the volume of imported coconuts in 2017. The top 3 countries in the segment also included C?te d'Ivoire with the share of 11%. During the first 9 months of 2018, imports of coconuts into the Russian Federation increased by 14.3%. Supplies increased as follows compared with January–September 2017: the Philippines, 19%; Indonesia, 7.3%; C?te d'Ivoire, 58.7%.
Now, let us focus on imports of other nut varieties. The leader in hazelnut supplies for 2017 was Azerbaijan, having accounted for 65% in imports. In January–September 2018, the share of this country equaled 59%. Its current main competitors in the segment are Turkey and Georgia. In 2013, Turkey was leading in imports of hazelnuts into Russia, having the share of 53% in total supplies in physical terms. However, since 2014 imports of Turkish nuts have been on the decrease, in particular due to the political situation and cooling relations between the countries. At the same time, imports of hazelnuts from Georgia increased substantially, from 28 tonnes in 2013 to 1.96 thousand tonnes in 2017.
In the segment of cashews, Vietnam ranks first in volumes of imports into Russia; it occupied 75% in imports in 2017 and 80% in January–September 2018. Volumes of cashew imports into Russia dropped by 42% total over the past 5 full years, from 10.2 thousand tonnes in 2013 to 5.9 thousand tonnes in 2017. Supplies from Vietnam specifically, which was contributing the most to imported volumes, declined by 48.7% during the time period in question. In this respect, it should be noted that the average price per tonne of cashews produced in Vietnam rose from $ 5.6 thousand in 2013 to $ 9.9 thousand in 2017.
Before the implementation of the sanctions, pistachios had been mainly supplied to Russia by 2 countries, namely Iran and the US; in 2013, their shares in imports equaled 52.5 and 42.4% respectively in volume terms. By 2017, volumes of pistachio supplies to Russia had plummeted from 13 thousand tonnes in 2013 to 3.3 thousand tonnes, Iran’s share having grown to 94%. In the first 9 months of 2018, imports of pistachios into Russia increased by a factor of 2.2, primarily through two-fold growth of Iranian produce as well as greater volumes of imports from China.
Imports of walnuts into Russia decreased as well in 2014–2016. The year 2017 and January–September 2018, however, were marked by growth in supplies of walnuts, in particular from Chile, Belarus, and China, making up the top 3 suppliers. It is interesting to note that in 2013, Ukraine was leading in imports with the share of 64.5%.
Domestic production of nuts in Russia is insignificant compared with the current volume of imports. According to the Russian Federal State Statistics Service (Rosstat), gross nut harvest in the country amounted to 15.6 thousand tonnes in 2017, which is 16.1% lower than the indicator for 2016 (18.6 thousand tonnes). 96% of nuts collected were provided by household plots.
Russia’s output volumes are formed by nuts from the Southern and North Caucasian Federal Districts, in particular, 6 key regions. The leader among the latter is Krasnodar Krai; in 2017, the region produced 4.6 thousand tonnes of nuts, having increased its indicators by 14.1% to 2016. It should be noted that the Republic of Crimea, which was leading in volumes in 2016, had its gross nut harvest indicators drop by 77% in 2017.
15.1 thousand tonnes of nuts were exported from Russia in 2017, 82% of which were pine nuts; 97% of the volume was sold to China. In January–September 2018, exports of nuts from the Russian Federation increased by 27%, amounting to 11.8 thousand tonnes. Growth in pine nut imports in particular reached 35%. We would like to highlight that, according to the International Nut and Dried Fruit Council, China ranked first in volumes of pine nut production globally in the 2017–2018 season, whereas Russia ranked fifth.
All in all, the Russian market for nuts is among the markets most dependent on imports: the share of imports in total market size is as high as 98%, reaching 100% in most segments. The existing restrictions on product supplies have had a substantial impact on a number of segments, which is perfectly illustrated by changes in share distribution among producer countries. In addition, nuts being a raw material for a number of products in the food industry, such as confectionery, the nut market has an influence on ranges of finished goods, including flavors and fillings for chocolate products.
Research by the Company “ID Marketing”