Fresh Deciduous Fruit Annual 2012

An Expert's View about Horticulture and Support Services in Russia

Posted on: 28 Dec 2012

In MY 2011 (July/June), Russia remained the largest importer of apples and pears in the world with a combined total of 1,621,860 MT of fruit.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 12/17/2012 GAIN Report Number: RSATO 1216 Russian Federation Fresh Deciduous Fruit Annual Russian Long Term Fruit Imports Remain Positive Approved By: Deanna Ayala Prepared By: Svetlana Ilyina Report Highlights: In MY 2011 (July/June), Russia remained the largest importer of apples and pears in the world with a combined total of 1,621,860 MT of fruit. Fruit sales in general are on a long term steady increase in Russia. In 2012, however, per capita fruit consumption in Russia was in par with 2011 and reached 70.8 kg. In 2013, consumption is expected to grow slightly supported by the trend toward healthy diets in Russia. Russia produces only one fourth of the fruit it consumes and therefore relies heavily on imports. In MY 2012, Russian imports of apples and pears are expected to go up slightly and reach 1,260,000 metric tons (MT) and 420,600 MT respectively. The grape import forecast is around 397,000 MT slightly higher the 2010 level. The share of American fruits is small in Russia, less than 1 percent. The niche carved out by U.S. fruits is in the premium and high quality segment. Russia’s recent accession to the WTO reduced import tariffs for apples immediately to 0.06 Euro/kg; rates for pears will be transitioned down to 5 percent by 2015, which is expected to facilitate greater market access to U.S. fruits. Apples, Fresh Production: Based on the Russian Federation Statistics Committee and other sour 1ces , Post forecasts MY12 apple production at 1,210,000 MT, 7.6 percent higher than in MY 2011. According to information from local contacts and growers, the current apple crop is excellent particularly in the “Non Black Soil Area” of Russia (Central, Uralskiy, and Northwest Federal Districts). This will compensate for a lackluster year in the other major growing region of Krasnodarskiy Kray, where growers project a 10 percent lower harvest due to flower bud damage by winter frosts and fruit damage from spring hail. ATO Russia increased its MY 2011 (July/June) domestic apple production figure up from 955,000 MT (metric tons) to 1,124,000 MT which is on par with previous year’s production. This reflects the significant drop in production in 2010 due to a major drought in Russia. Commercial production data is based on industry reports and shows relatively steady increases, to 440,000 MT in MY12, due to improving yields in intensive orchards. Non-Commercial production was revised upward to 732,800 MT in MY11, also reflecting a major recovery post-drought. Good weather in MY11 helped to push apple production up and it exceeded ATO Russia’s previous estimation. Note: Approximately 65 percent of the domestic crop is grown on private plots for personal consumption. The forecast for MY12 apple acreage is 214,000 planted hectares, on par with MY11 at 214,500 HA. Post also revised its MY10 estimate down from 220,000 HA to 217,000 HA. According to industry experts this trend will continue downward because producers are replanting old orchards with more profitable crops such as vegetables and wheat. That said, the industry is making a concerted effort to make apple production bigger and more profitable, primarily through increasing yields. In 2012, the average yield per hectare in Russia was around 6.6 tons per ha attributed mainly to low yields in older orchards which make up 75 percent of total area planted according to some industry estimations. The productivity of commercial orchards is expected to increase because growers have planted intensive orchards in big agricultural enterprises which have started to bear fruit. The productivity in these orchards varies from 12 to 40 tons per hectare, and possibly more in a good year. So, in approximately 2-3 years Russia could produce more “first class” apples (70+ in size and good color) with longer shelf life for retail. In 2012, total supply is forecast up, to 2,470,000 MT. The abundant supply in MY11, 2,325,000 MT, was cited by some as the cause for a drop in the price of apples by 15-20 percent. In October 2012 the farm gate price of apples for consumption varied from 15-32 rubles per kg ($0.48-1.04)2, depending on quality and variety of fruit. Growers sell mostly truckloads to regional wholesalers in the Northwest of 1 Post estimates are based on the Russian Federal Statistic Committee “seed type fruit” data, the All-Russia Census of Agriculture 2006, and interviews with farmers. 2 30.79 rubles /$1 is the exchange rate used for conversions in the current report. For the Dollar/Ruble/Euro conversions fluctuations please refer to 2 Russia, Siberia and Central Russia or small wholesale shipments to local traders and families. There are a few growers in Krasdonarskiy Kray who produce good quality 65+ sized apples in good volumes and can secure a consistent supply for retail chains. In general, organized retail establishments tend to prefer imported apples. The Gala, Semerenka (a Russian light green sour variety), Golden Delicious, Red Chief, Florina, and Granny Smith varieties remain the most popular with growers. Smaller-sized apples with possible damage are used in juice concentrate, puree, and jam production. APK Inform3 estimates that 50 percent of the domestic crop is going into processing. In 2012, the demand for local apples for juice production is high because of the lower supply and higher prices of Chinese apple concentrate. Secondly, apple juice remains the most popular juice in Russia with around 18 percent share of 3 billion liters of total juice production. However, the prices for such apples are very low, i.e. 3-5 rubles ($0.1-0.16) per kg. According to APK Inform, Russian and Ukrainian growers have losses of up to 12-13 percent of apples annually due to inadequate storage facilities or late harvesting. This year the losses could reach 15 percent because the apples ripened two weeks earlier than the normal harvesting due to warmer temperatures. Some apples were overripe when harvested and put into storage thus shortening their life span even in modern storage facilities. In 2012 Russian producers continued to invest in infrastructure to improve the quality and marketability of their apples. For example, many orchards are investing new storage facilities or renovation of existing storage. With more up-to date storage they believe they could expand the sales season for local apples and increase revenue. According to industry sources, growers have 20% more storage facilities compared with last year. Growers also continue to replace the old orchards with “semi intensive” and “intensive” techniques although not at the same rate as orchards are being converted to other crops or abandoned. Those converting to “semi” or “intensive” production are using Italian, Serbian, Polish, and Ukrainian root stock. In 2012, the Government of the Russian Federation provided support in the form of a 10 percent reimbursement of the cost of orchard renovation works, which for intensive types of orchards reportedly totaled around RUB1,200 -1,300 ($38,974-$42,222). Nevertheless, this level of support is still not sufficient to encourage rapid industry renovation. On July 14, 2012, the State Program for the Development of Agriculture and Regulation of the Agricultural Products and Raw Materials Markets for 2013-2020 was adopted (Resolution # 717 signed by Prime Minister Medvedev). This program has numerous provisions devoted to horticulture development including: partial reimbursement for new orchard planting, partial reimbursement for old orchard removal, cultivation development, financial support for research in new varieties and seed breeding, and lower interest rates for investment in storage facilities. The program states that the level of funding for measures supporting the cultivation of plants and perennials and plant-based product processing will reach RUB466.5 billion ($15.2 billion) during the span of the program, 2013-2020. The cost estimate for 2013 is RUB 45.8 billion ($1.4 billion). The budget appropriation of these sums must 3 APK-Inform Co is an agricultural information agency specializing in agricultural production, trade, and distribution analysis. 3 be included in the Federal budget, discussion of which usually takes place in the Duma in November/December. Consumption: Fruit sales in general are on a steady increase in Russia (see Table 8). However, official statistics show that per capita fruit consumption is relatively flat. In 2011, per capita fruit consumption remained on par with 2010 at 70.8 kg. Fruit consumption in Russia varies widely depending on geographic location. In rural areas and small cities, Russians tend to consume locally grown fruits and vegetables where a lot of canning is traditionally done in order to preserve fruits and vegetables for out of season consumption. Fruit consumption, especially imported fruit, is substantially higher in urban areas such as Moscow, St. Petersburg and Vladivostok. According to Statistic Committee data, the average monthly spending for food products per person was 3,127.3 rubles ($101.57) of which 7.8 percent went to fresh fruits. Russians are still hesitant to go back to their pre-2008 crisis spending levels despite signs that purchasing power is increasing due to the higher income and lower unemployment. Consumers remain cautious and their purchasing behavior reflects a calculated balance between price and quality. Apples are the most popular fruit in Russia. Apples alone capture 25 percent of the fruit market and are recognized in Russia as one of the healthiest products. In 2011, apple per capita consumption was 10.8 kg per person, slightly lower than in 2010. In MY12, domestic consumption of apples is expected to go up from 1,544,000 to 1,550,000 MT due to their popularity and affordable prices. Apples are one of the least expensive fruits in Russia, which is critically important and often cited as the main criteria in food procurement. AT Russia expects the consumption of apples in Russia will continue to grow slightly. Russian consumers know such varieties as Semerenko, Beliy Naliv, Ranet, Royal Gala, Golden and Granny Smith. Russians have a strong preference for locally-grown apples (i.e. in grown in Russia or the former Soviet republics such as Ukraine and Moldova) and prefer to buy them in season, in the September-November. Trade: Russia is the largest importer of apples in the world. In 2011, import volume reached 1,201,280 MT (8 percent increase over the 2010 record) or $719.1 million, up 4.6 percent from MY10. In MY11, the major suppliers of apples to Russia were: Poland (463,887 MT), Moldova (178,613 MT), China (127,528 MT), and Serbia (96,983 MT). The supply of good quality and affordable apples from these countries represented 70 percent of imports. Post expects this trend to continue in the MY12 season. Poland has become a particularly strong apple supplier to Russia. In 2011, Poland expanded its exports of apples to Russia by 83 percent. Meanwhile, Chinese exports to Russia are declining, perhaps due to growing Chinese domestic consumption. Chinese apple exports have decreased from 203,178 MT in 2008 to 158,307 MT in 2011. Exports from Italy, France, the United States, and Southern Hemisphere countries declined significantly because the weakening of the Russian ruble made them too expensive for many consumers especially when less expensive and good quality apples were available from other sources. 4 Imports in MY12 are expected to increase slightly to 1.26 MMT. As of October 2012, the Russian market is flush with apples both domestic and imported and the prices are 15-20 percent lower than last year. In MY12, Poland, Moldova, Ukraine, Azerbaijan, Hungary, and Serbia will dominate the Russian market. These countries are gaining market share because they can offer good prices and quality – which is improving every year. Meanwhile, according to the World Apple and Pear Association (WAPA), in 2012 apple production in Europe is lower than three-year average. Golden Delicious production will be down by 15 percent, Gala by 6, and Red Delicious by 18, while Ida Red will go up by 34 percent given larger crop in Hungary and Poland. In MY11, U.S. apple exports to Russia dropped by more than half from 12,614 MT in 2011 to 5,529 MT. The 2012 season, like the previous one, will also be very difficult for American apples in Russia because of competition from other suppliers, as noted above. Two of the strong selling points of American apples are long shelf life and consistent quality. Russian consumers like large, richly colored apples, which are characteristics that U.S. suppliers can normally provide. This year the American domestic market is very good and the prices are high for Washington apples due to the low crop on the East Coast. ATO Russia expects that due to higher prices American apple sales in Russia in MY12 will be difficult and won’t likely exceed last year levels. Prices for apples as of October 23, 2011 at the distribution level in St. Petersburg are as follows: Polish apples -- 30-33 rubles per kg ($0.97-1.07) Moldavian apples -- 30 rubles per kg ((0.97) Serbian -- 46 rubles per kg ($1,49) Spanish -- 57 rubles per kg ($1.85) Pears, Fresh Production: ATO Russia revised the pear production figure for MY11 (July/June) down to 124,100 MT in accordance with Russian Statistic Committee data and interviews with farmers which indicate that actual losses from frosts in Krasnodar were significant and overall production dropped by at least 10 percent. Commercial production accounted for 18,900 MT and household plots for the remainder. Commercial production of pears is concentrated in the Southern and Volga Valley region of Russia. The main pear varieties popular with Russian growers are Abbat Fettel, Williams, Conference, Kyure, and Lesnaya Krasavitsa. Local varieties are able to withstand winter frosts better, but their fruits are generally considered to be less flavorsome. In 2012, pears suffered from frosts again and the crop was also damaged by slow worm. The production in MY12 is estimated around 112,000 MT (17,000 MT of commercial production and 95,000 MT of household production). Pear production is declining in popularity because of the pear’s sensitivity to frost and lack of resistance to plant diseases compared to other crops. Therefore, ATO Russia believes that commercial pear production will continue to decline. In contrast, pears are often planted in private orchards where families grow pears for personal consumption and winter canning. Consumption: 5 Pears are one of the most popular fruits in Russia following apples, citrus, and bananas. Based on import and production data, pear consumption per capita is around 3.5 kg. In MY11, consumption totaled 510,000 MT and ATO Russia believes that consumption will remain at that level in MY12. For Russians, the ideal pear is usually described as juicy, crispy, sweet, and not overripe. Russians usually eat pears as a whole fruit or sometimes include it in fruit salads. Consumers know some of the most popular pear varieties like Conference, Williams, and Red Bartlett, but don’t pay a great deal of attention to product origin. Pears are not associated with a definite season in Russia and people buy them year round. Consumers tend to buy pears in chain supermarkets during their weekly shopping, and some still make purchases close to home at fruit kiosks and open air seasonal kiosks. Pear-based desserts are increasingly available on menus of high end and casual restaurants and are gaining popularity with consumers pursuing healthier diets. Pear consumption patterns are different in rural areas because of lower incomes and because many rural residents grow their own fruits and vegetables. Around one-quarter of the Russian population lives in rural areas and consumes pears grown on their own plots or their neighbor’s. Trade: In MY 2011, Russia remained the world’s largest importer of pears with 420,580 MT of imports by volume and $462.2 million by value (a 2.5 percent increase in volume and almost by 9 percent increase in value terms from last year). In MY11, the largest suppliers of pears to Russia were: Belgium (128,313 MT), Argentina (91,475 MT), and the Netherlands (71,425 MT). Russia sourced around 58 percent of all pears from European countries. Polish pears, which tend to be less expensive, expanded sales to Russia by 25 percent. Southern Hemisphere countries continued to supply pears in the winter season. U.S. pear imports to Russia totaled 6,919 MT, down 28 percent from the previous season. U.S. pears experienced sluggish sales due to strong competition from the European pear crop which was up by 12 percent. For MY12, imports are forecast to reach 420,600 MT. According to the World Apple and Pear Association, the 2012 season crop in Belgium, the Netherlands, and Spain will be significantly lower. The production of Conference could drop by 21 percent, Abbat Fetel by 26 percent, and Williams by 19 percent. The crop in Southern Hemisphere countries is also forecast to be 10 percent lower. Post expects Poland could fill in and replace the missing volumes with less expensive pears. American pears have a potential to expand sales if the price fits the market. The wholesale price in St. Petersburg for Conference pears from Belgium is in the range of 47.5 - 58 rubles ($1.53-$1.88), Dutch Durando pears – 50 rubles per kg ($1.62), Polish pears 40 rubles per kg ($1.3) as of October 22, 2012. Grapes, Table, Fresh Production: Post revised the table grapes production for MY11 in accordance with Russian Statistic Committee data and based on information from industry sources. Based on the official record, table grapes production in MY11 reached 80,630 MT including commercial 44,950 MT and non-commercial 35,680 MT production. However, post decreased the number of the table grapes produced by households to 11,800 MT, because the majority of the product grown on private orchards goes into home wine production rather than table grapes. Accordingly, total grape production is estimated at 62,750 MT. 6 In MY12, Russian production of table grapes is expected to be 10 percent lower. Some grape vines were winterkilled by strong frosts in Krasnodarskiy Kray, the main grape producing area in Russia. The total domestic grape production in the current season is estimated around 56,470 MT. Table grape production in Russia is limited for several reasons. Firstly, the climate limits growing to very few areas in the South of the Russian Federation. Secondly, competition from wine grapes and other crops is very strong. The production of the wine grapes is ten times greater than table grapes production in Russia. Table grape production is very labor intensive while wine grapes are picked by machines and have a guaranteed channel of sales. Thirdly, according to wholesalers, imported table grapes are preferable to domestic because they have a longer storage life, nearly a month versus domestic grapes that need to be sold within 5-20 days. The most popular grape varieties cultivated in Russia are local. Plevan are white grapes (around 30 percent of the crop), harvested in mid August. The Moldova is a black grape (around 70 percent of the crop; harvested in mid September). Prices in September were around 20-24 rubles per kg ($0.65-0.78), 20 percent higher compared with 2011. The domestically grown grapes are usually consumed where they are grown via farmers’ markets. During the season, some shipments of the Moldova variety go to big cities in Siberia and the Urals areas. This year, farmers claimed to have problems selling their harvest via retail channels, which are interested in longer shelf life and year round supply. Consumption: Grapes are one of the most popular fruits in Russia, almost on par with pears but after apples, bananas, and citrus and consumption is still growing. According to the Russian Statistic Committee, in 2011 grape per capita consumption in Russia reached 3.1 kg, up 10 percent compared to 2010. It is unclear which direction consumption will go in MY12. While consumption will be supported by healthier diets and recognition of fruits as one of the basic elements of a healthy diet, economic uncertainty could change purchasing habits and reduce purchases of grapes in favor of very simple fruits. ATO Russia’s estimation of MY12 table grape consumption is 444,000 MT, slightly above the 2011 level (443,827 MT). Russians prefer seedless and beautiful grapes and usually buy Uzbeki and Moldovan grapes in season. Both consumers and traders still consider grapes from former Soviet bloc countries “local product”. Grapes are available year round in Russia. However, the peak consumption months are August – November (66 percent of annual sales), when the most affordable and well-known grapes from Moldova, Uzbekistan, and Kyrgyzstan are available. Many Russians buy grapes during their weekly shopping in supermarkets and discounters. However, during the fall season, Russians purchase a lot of fresh seasonable grapes and other produce spontaneously on a daily basis and usually in open-air fruit stands, where the product from former Soviet Republics is broadly available. Grapes are available on the shelves of big city supermarkets year round. The retail chains tend to supply product from Turkey, Italy, Argentina, Peru, and South Africa. Grapes form NIS countries are available in retail chains soon after picking, when it is possible to get volumes of product on a regular basis. Like wholesalers, retailers comment on the shorter life span of “local grapes” and also note that the 7 percentage of waste during handling is much higher compared to product from Europe or South America. Trade: Russia remains one of top importers of grapes in the world. In MY11, Russia imported 392,628 metric tons, worth $530.9 million, down by 4 percent in volume and value. Turkey, the largest exporter to Russia, supplied 167,518 MT in MY2011, almost 40 percent of the Russian grape market by volume. Uzbekistan remains the second biggest supplier with 62,996 MT, followed by Chile with 32,723 MT. In MY12, the grape import forecast is around 397,000 MT, slightly higher than in 2011. In June – August 2012, import volumes reached 83,858 MT, the same amount as in 2011 for this period. Turkey remains the major supplier of grapes to Russia. Uzbekistan, Moldova, and Armenia are increasing sales to Russia and probably will capture 25 percent of the Russian grape market in 2012. And due to counter-seasonal production, grapes from Argentina, Chile, and South Africa arrive in January and dominate the market until June. Exports from Argentina could be lower this year because of low crop. On the other hand, Peru announced a good crop and expanded plans for exports in MY12. In MY11, California table grape imports to Russia were down to 1,780 MT from 3,718 MT in 2010 due to strong competition from Italian grapes, the main competitor of the California grapes in terms of price and quality. In MY 2011, importers claimed quality problems with California grapes that could inform purchasing habits in the coming season. The season for California grapes peaks in November and December. A new addition to the competitor field is Peru, whose grapes are in season earlier than product from other South American countries and fit the pre-holiday sale season. In MY12, Europe and Peru have stable crops of grapes. With these strong competitors in the narrowing niche of high end grapes in Russia, American grapes must be high quality and competitively priced to gain market share in Russia. During the week of October 22, the wholesale price for Italian white/red grapes was 80-83 rubles ($2.6- $2.7) per kg. Prices for Uzbeki white seedless grapes and black grapes were 40-45 rubles ($1.29- $1.46) per kg. Policy: August 22, 2012, Russia officially jointed the World Trade Organization (WTO). While Russia’s full- fledged WTO accession promises to reform some measures, the transition to full compliance with international standards is unlikely to be immediate. Many of Russia’s food and trade regulations have or are undergoing reform as Russia readies itself for international standards and unification of the Russia-Belarus-Kazakhstan Customs Union (CU) which entails policy integration and unification. Post recommends checking regularly the database of Attaché reports for updates under the “sanitary/phytosanitary/food safety report” category and also advises that exporters consult with their importer in order to ensure that they have the most up- to-date information. A revised Customs Union Tariff Schedule reflecting Russia’s WTO tariff commitments came into effect as of the first day of Russia’s WTO membership - August 22, 2012. In the table below please find updated information for apples, pears, and grapes harmonized codes and tariffs changes. The full current 8 Tariff schedule for all products can be found on the Customs Union web site in Russian: Table 1. Harmonized codes and tariffs according to updated the Customs Union Tariff List. Harmonization Product Customs duty (in percentage of customs code value, either in USD or Euros per kg) Current WTO tariffs Old tariffs 0806 Grapes fresh and dried 0806 10 Grapes fresh 0806 10 100 0 Table grapes fresh 5% 5% 0808 10 Apples 0808 10 100 0 Apples for cider production, bulk 0.2 Euro per kg 0.2 Euro per kg from September 16 - December 15 0808 10 800 Other: 0808 10 800 1 Apples from 1 of January to 31 of March 0.06 Euro per kg 0.1 Euro per kg 0808 10 800 2 Apples from 1 of April to 30 of June 0.06 Euro per kg 0.1 Euro per kg 0808 10 800 3 Apples from 1 of July to 31 of July 0.06 Euro per kg 0.1 Euro per kg 0808 10 800 4 Old Apples from 1 of August to 31 of N/A 0.2 Euro per kg code December From August 1 to November 30 0808 10 800 5 New Golden Delicious or Granny Smith 0.2 Euro per kg N/A code varieties 0808 10 800 6 New Other 0.1 Euro per kg N/A code From December 1 to December 31 0808 10 800 7 New Golden Delicious or Granny Smith 0.2 Euro per kg N/A code varieties 0808 10 800 8 New Other 0.1 Euro per kg N/A code 0808 20 500 0 Old Pears N/A 10% Code 0808 30 New Pears Code Pears for perry or pear cider production, 10% N/A 0808 30 100 0 bulk from August 1 to December 31 New code 0808 30 900 0 Other 10% N/A New code 0808 40 000 0 Quince 10 % N/A New code Apples, pears and grapes from certain developing and less developed countries qualify for preferential import duties under the Customs Union Commission Decision #130 which approved a list of products enjoying the tariff preferences and can be found here: A list of the developing and least developed 9 countries who are eligible users of preferences can be found here: The duty for products with preference is 75% of the regular duty calculated in USD or Euros. For example, the duty on 1 kg of U.S. pears is 10 percent and for pears from Argentina 7.5 percent. The duty is calculated based on the price of the invoiced goods subject to verification compared to an “indicative price” by the Customs official. Russia is moving toward ratification of a Free Trade Agreement with CIS countries including Ukraine, Belorussia, Kazakhstan, Armenia, Kyrgizstan, Moldova and Tajikistan. If the agreement comes into force as is currently planned, apples, pears, and grapes from the aforementioned countries will enjoy zero customs duties. Fruits and vegetables are subject to sanitary-epidemiologic control, based on Decision # 299 on Use of Sanitary Measures in the Customs Union. This inspection checks whether the imported produce complies with the chemical, radiological, biologically active, microbiological, and pesticide content norms of the Russian Federation. The Unified Sanitary–Epidemiological requirements can be found in Russian on the website of the Customs Union: The Russian competent authority, Federal Service for Veterinary and Phytosanitary Surveillance (VPSS), requires that the exporter provide information to VPSS on the pesticides used at growing and storage location of the plant products, on the date of the last treatment, and on the MRLs of pesticides in these products. The information may be in the form of a letter from producer or from the producer’s association. There is no standard form, but VPSS developed a sample form of a letter (declaration) in Russian on pesticides (see Attachment I). The maximum residue levels for pesticides specifically can be found in the following GAIN report The Customs Union Update on MRLs for Pesticides in Ag Products: MRLs%20for%20Pesticides%20in%20Ag%20Products_Moscow_Russian%20Federation_12-22- 2010.pdf Apples, pears and grapes, as products of recognized high phytosanitary risk, go through phytosanitary control. Please refer to GAIN report RS1102 _ Russia Updates Quarantine Regulations of Imported Products _ Moscow _ Russian Federation _ 1/18/2011 ( ulations%20of%20Imported%20Products_Moscow_Russian%20Federation_1-18-2011.pdf) which provides detailed information on the list of quarantine objects that shall be controlled in products imported from the United States, and also an unofficial translation of the general phytosanitary requirements of the Russian Federation for imported products subject to phytosanitary control at the border and inside the territory of the Customs Union, specified by products groups. Fresh produce shipments should be accompanied by a Phytosanitary certificate from the exporting country authorities (APHIS for American produce) to be able to certify and clear products in Russia. 10 The issuance date of the certificate should be before the actual departure of the lot from the territory of the authorized body which issued the certificate. The phytosanitary certificate must be typed, not hand written. The net weight in tons or kilograms must be identified in the document. The weight in the certificate should comply with actual weight of the shipmen and weights identified in Bill of Lading and Invoice. All boxes on the document should be completed. If there is a box requesting information not applicable for the current shipment, the empty box should be marked with cross. Each of these defects in filling out the phytosanitary certificate causes Customs authorities to question the importers and requires extra effort and time for shipment clearance that makes the produce more expensive and less competitive on the market. Import procedures: The importer must undertake several steps while handling fruit and vegetable imports into the Russian Federation: 1. Russia no longer requires an Import Quarantine Permit for imported products. (See GAIN RS1140 Russia No Longer Requires Import Quarantine Permit) 2. The importer must obtain a declaration of conformity prior to product shipment. This document certifies that the product conforms to quality standards of the Russian Federation. The certification bodies approved by the Russian authorities have the right to issue the declaration of conformity. The declaration can be issued for one shipment or according to the contract for several shipments. The declaration of conformity is issued based on a copy of the contract and phytosanitary certificate of the exporting country authorities. The certificate of Conformity will accompany the product use and sales in Russia. 3. The importers must submit originals of all documents necessary for sanitary, phytosanitary control and customs clearance. For major fruits and vegetables the package of documents should be as follows: 1. The customs declaration; 2. Documents confirming the legal capacity of the importer; 3. The contract, an invoice, bill of lading, packing list; 4. Declaration of conformity (issued by Russian certification body before product shipment) 5. A Phytosanitary certificate from the exporting country authorities (APHIS for American produce); 6. Declaration of Safety of food production of plant origin (of the phytogenesis) delivered to the Russian Federation according to norms, concerning pesticides residues, established by the Russian legislature. (Attachment I). 7. Certificate of Safety for some types of produce from European Union and South American countries issued by certified laboratories, stating that the produce complies with MRLs norms in Russia 8. Russian Customs may ask as well for the certificate of origin (released by the producers) and export declaration (issued by the customs authorities of the exporting country). 9. Customs Duty payment confirmation; 11 10. Supporting documentation with respect to the declared customs value of the goods (e.g., foreign trade contract, payment documentation, exporter’s official price lists, etc.); Marketing: Russia is one of largest buyers of fruit in the world and is recognized as a priority market by many European, Turkish, Moroccan, and South American growers. Almost all these countries actively promote their products among the Russian trade via educational tours in their main growing areas including introductions to main growers and promotions and professional training in Russia. The major global exporters of fruit took part in the World Food Moscow annual trade show in September 2012. The Fruit Pavilion has become the largest pavilion at the show. The major Russian importers use this platform for negotiations for the coming season. The USDA Agricultural Trade Office in Russia traditionally organizes an American Pavilion during World Food Moscow. Post highly recommends that new-to-market companies who are interested in Russia join the pavilion in 2013. ATO Russia and USDA Washington D.C. will assist with logistics and the ATO can arrange introductions to the major fruit players in Russia. For more information about participating in the American Pavilion at World Food Moscow please contact: Photos from World Food Expo are available on the Fresh News magazine photo report and on the FAS Russia website: In Russia, marketing of fresh produce is becoming more and more sophisticated. The retail chains are open to hosting tastings, samplings, and/or informational displays. Such events create better awareness of the product among the final consumers and encourage sales. In Western Russia such events can increase sales significantly. In 2012, the Association of Citrus Growers from South Africa sponsored a Citrus Conference during World Food, where they met major Russian importers and discussed the market potential and challengers in Russia. Chile also focused marking efforts on Russia in 2012 including a trade mission to Russia to develop contacts between fruit traders of both counties. FROM, the biggest producing cooperative of apples in Italy, launched a Russian-language site devoted to apples from the Alps, commissioned billboards and can provided promotional materials to retail to promote its product. These are but a few examples of aggressive and effective promotions in Russia. 12 Production, Supply and Demand Data Statistics: Table 2. PSD Table, Apples Apples, Fresh R 2010/2011 2011/2012 2012/2013 ussia Market Year Begin: Jul Market Year Begin: Jul Market Year Begin: Jul 2010 2011 2012 USDA O New P USDA ost N USDA ew Post New Post fficial Official Official Area Planted 220,000 217,000 215,000 214,500 214,000 Area Harvested 170,000 173,000 170,000 170,000 169,000 Bearing Trees 88,000 89,000 89,000 89,000 92,000 Non-Bearing Trees 34,000 35,000 37,000 38,000 39,000 Total Trees 122,000 124,000 126,000 127,000 131,000 Commercial 560,000 350,000 585,000 391,200 440,000 Production Non-Comm. 350,000 560,000 370,000 732,800 770,000 Production Production 910,000 910,000 955,000 1,124,000 1,210,000 Imports 1,110,700 1,110,700 1,210,000 1,201,280 1,260,000 Total Supply 2,020,700 2,021,700 2,165,000 2,325,280 2,470,000 Fresh Dom. 1,199,700 1,530,000 1,324,000 1,544,000 1,550,000 Consumption Exports 500 4,000 1,000 5,000 6,000 For Processing 800,500 457,700 800,000 721,280 854,000 Withdrawal From 20,000 30,000 40,000 55,000 60,000 Market Total Distribution 2,020,700 2,021,700 2,165,000 2,325,280 2,470,000 HA, 1000 TREES, MT Table 3. Import Trade Matrix for Apples in Metric Tons, MY 2010-2011 Year 2010 2011 U.S. 12,614 U.S. 5,529 Others Others Poland 252,773 Poland 463,887 China 158,307 Moldova 178,613 Moldova 148,588 China 127,528 Serbia 96,983 Serbia 85,301 Italy 64,407 Italy 58,345 Argentina 51,603 France 45,404 Ukraine 50,984 Azerbaijan 43,581 France 50,635 Chile 37,687 Chile 49,114 Argentina 35,669 Belgium 47,627 Belgium 25,264 Total for Others 971,021 Total for Others 1,101,279 Others not Listed 139,668 Others not Listed 100,001 Grand total 1,110,689 Grand total 1,201,280 13 Source: Global Trade Atlas Table 4. PSD Table, Pears Pears, Fresh Russia 2010/2011 2011/2012 2012/2013 Market Year Begin: Jul Market Year Begin: Jul Market Year Begin: Jul 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Area Planted 38,000 35,000 0 32,300 30,600 Area Harvested 29,000 28,000 0 26,500 25,270 Bearing Trees 12,000 11,000 0 10,500 10,200 Non-Bearing Trees 4,000 3,000 0 2,750 2,700 Total Trees 16,000 14,000 0 13,250 12,900 Commercial 20,000 20,000 21,000 18,900 17,000 Production Non-Comm. 115,000 115,000 120,000 105,200 95,000 Production Production 135,000 135,000 141,000 124,100 112,000 Imports 409,900 409,900 425,000 420,580 420,600 Total Supply 544,900 544,900 566,000 544,680 532,600 Fresh Dom. 499,800 492,000 511,200 510,000 510,000 Consumption Exports 100 1,500 800 55 100 For Processing 40,000 40,400 43,000 22,625 14,300 Withdrawal From 5,000 11,000 11,000 12,000 8,200 Market Total Distribution 544,900 544,900 566,000 544,680 532,600 HA, 1000 TREES, MT Source: Rosstat, Global Trade Atlas, trade press, interviews Table 5. Import Trade Matrix for Pears And Quinces in Metric Ton, MY 2010-2011 Year 2010 2011 U.S. 9,635 U.S. 6,919 Others: Others: Belgium 139,185 Belgium 128,313 Argentina 108,126 Argentina 91,475 Netherlands 46,375 Netherlands 71,425 China 26,602 Poland 32,910 Spain 20,906 China 19,633 South Africa 13,140 South Africa 16,344 Poland 11,195 Spain 14,974 France 7,566 Italy 9,777 Portugal 6,319 France 7,973 Chile 6,075 Portugal 6,695 Total for others 385,489 Total for others 399,519 Others not listed 24,446 Others not listed 21,060 Grand total 409,935 Grand total 420,579 14 Source: Global Trade Atlas Table 6. PSD Table, Grapes Grapes, Fresh Russia 2010/2011 2011/2012 2012/2013 Market Year Begin: Jun Market Year Begin: Jun Market Year Begin: Jun 2010 2011 2012 USDA USDA USDA O New Post st fficial O New Pofficial O New Post fficial Area Planted 7,500 6,200 0 6,200 61,300 Area Harvested 5,500 4,400 0 4,500 45,550 Commercial 27,800 27,750 28,500 44,950 40,450 Production Non-Comm. 2,500 2,500 2,700 11,800 10,620 Production Production 30,300 30,250 31,200 56,750 51,070 Imports 407,700 407,730 410,000 392,628 397,000 Total Supply 438,000 437,980 441,200 449,378 448,070 Fresh Dom. 435,800 422,980 439,050 442,700 443,000 Consumption Exports 200 500 150 175 170 For Processing 0 0 0 0 0 Withdrawal From 2,000 14,500 2,000 6,503 4,900 Market Total Distribution 438,000 437,980 441,200 449,378 448,070 HA, MT Source: Rosstat, Global Trade Atlas, trade press, interviews Table 7. Russia: Import Trade Matrix for Grapes in Metric Tons, MY 2010-2011 Year 2010 2011 U.S. 3,718 U.S. 1,780 Others: Others: Turkey 167,518 Turkey 160,154 Uzbekistan 53,504 Uzbekistan 62,996 Chile 42,959 Chile 32,723 Italy 28,409 Moldova 23,109 Moldova 16,873 Italy 22,867 Argentina 15,450 Peru 16,556 South Africa 13,628 South Africa 15,028 Peru 13,185 Argentina 10,953 Kyrgyzstan 13,067 China 10,110 China 11,800 India 7,392 Total for Others 376,393 Total for Others 361,888 Others not Listed 31,343 Others not Listed 30,740 Grand total 407,736 Grand total 392,628 Source: Global Trade Atlas 15 Table 8: Forecast Sales of Fruits by Category: Total Volume 2009-2014, in thousand tons 2009 2010 2011 2012 2013 2014 Apples 1,454.5 1,541.9 1,619.3 1,670.3 1,710.1 1,737.3 Bananas 927.6 972.6 1,010.6 1,059.9 1,098.5 1,121.8 Cherries 104.6 114.4 124.7 135.6 145.4 154.8 Cranberries/Blueberries 32.3 34.4 36.1 37.8 38.2 38.6 Grapefruit/Pomelo 80.4 82.5 83.3 84.7 85.7 86.5 Grapes 440.4 468.8 505.6 531.4 564.5 588.3 Lemon and Limes 187.8 191.5 192.5 195.3 197.2 201.2 Oranges, Tangerines and Mandarins 1,007.3 1,037.0 1,120.0 1,215.7 1,302.5 1,383.9 Peaches/Nectarines 160.8 171.2 192.7 212.4 229.7 246.3 Pears/Quinces 419.6 438.7 483.1 522.5 555.2 582.3 Pineapple 29.7 31.7 33.9 36.6 38.9 40.5 Plums/Sloes 86.2 90.9 96.7 101.9 106.2 110.3 Strawberries 79.2 86.4 94.0 101.1 108.1 113.6 Other Fruits 673.8 714.9 752.3 806.2 859.6 898.8 TOTAL 5,684.2 5,977.1 6,344.8 6,711.4 7,039.7 7,304.0 Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Other Relevant Reports Attaché reports on the Russian food and agricultural market are available on the FAS Website; the search engine can be found at Exporter Guide: Opportunities in Russia ian%20Federation_7-6-2012.pdf Food and Agricultural Import Regulations and Standards Narrative 0Regulations%20and%20Standards%20-%20Narrative_Moscow_Russian%20Federation_1-17- 2012.pdf Russian Retail Sector continues expansion n%20Federation_9-24-2012.pdf 16 Market Opportunities for Key U.S. Products in Russia 0U.S.%20Products%20in%20Russia_Moscow_Russian%20Federation_3-20-2012.pdf Russia Update Quarantine Regulations of Imported Products lations%20of%20Imported%20Products_Moscow_Russian%20Federation_1-18-2011.pdf Customs Union Update on MRLs for Pesticides in Ag Products MRLs%20for%20Pesticides%20in%20Ag%20Products_Moscow_Russian%20Federation_12-22- 2010.pdf 17
Posted: 28 December 2012

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