Smoothie time

Russia’s embargo is about to flood Europe with cheap fruit and vegetables

August 8, 2014
August 8, 2014

There are only so many apples that Polish people can eat. In response to a Russian ban on Polish apple imports last month, Poles have been munching on more of the fruit in a public show of support for local farmers.

Now that Russia has banned the imports of fruit and vegetables (among other foods) from the entire European Union, Poland’s experience soon may play out across the continent. The EU exported $2.7 billion worth of produce to Russia last year:

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That’s around 30% of Russia’s total produce imports, or only 5% of the EU’s foreign sales. But Russia’s share of Europe’s fruit and veg trade varies significantly by product—it bought 14% of the EU’s apple exports last year, and nearly 20% of its pears.

The Kremlin’s ban on imports took effect yesterday and will last for a year. While it’s never a good time for farmers to lose a big market like Russia, now is particularly inopportune. Bumper crops have pushed down prices in recent months, which is bad for producers as well as policymakers—the euro zone has been flirting with deflation this year, and a glut of produce once destined for Russia but dumped closer to home could push prices down even further:

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“We can only hope that European consumers eat more pears,” a Belgian fruit farmer told the Wall Street Journal (paywall). Belgium shipped $127 million worth of pears to Russia last year, or nearly 40% of its total pear exports. Diverting these to other hungry emerging markets requires a major restructuring of supply chains on short notice. “We are not developed enough to sell into China,” an official from Poland’s fruit lobby told FreshPlaza.

To add insult to injury, the upcoming apple harvest in Europe will be one for the record books, according to an industry forecast published yesterday. “The same day it’s announced we have a big crop our largest customer, Russia, stops buying, so it’s like a Black Thursday,” the commercial manager of a French apple concern told FreshPlaza.

“The producers will be hit,” an Athens fruit seller told Euronews. “But the people in the cities will eat cheap fruit.”

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