Russian sanctions a windfall for SA perishable exporters?

Russian sanctions on the import of many agricultural products, agri raw materials and other foodstuffs from the EU, US, Norway, Canada and Australia could open up a door for SA perishable producers. Russia, which imported US$43.1 billion of food and raw agricultural materials last year, is by far the biggest buyer of European fruit and vegetables and is the second biggest importer of US poultry. And, since the country is heavily dependent on the import of many of the goods listed in the Russian government notice of the ban – including, fish, beef, pork, poultry, vegetables, fruit and cheese and other dairy products – the country has to replace them by switching to imports from other areas. And according to information forwarded to FTW from a knowledgeable ship’s agent in Finland, those are to include SA (fruit and vegetables) and South America (meat, fruit, vegetables) amongst the others. Added to that, many European exporters believe the likes of Brazil and SA will especially benefit from the spin-off from Russia’s food ban as the two countries are fellow members of the Brics (Brazil, Russia, India, China, SA) economic bloc – and major exporters of a range of perishable products. But will this chance turn into a reality? The current SA trade situation with Russia suggests it could. Trade with Russia is quite negligible, according to the SA Foreign Policy Initiative (SAFPI). But agricultural and agro-processed products (eg, citrus and other fruits, wine, preserved fruits, jams and fruit juices) represent about 40% of our exports. “We don’t start from a zero base, and are currently sending about 8% of our total fresh fruit exports to Russia,” said Anton Kruger, CEO of the Fresh Produce Exporters’ Forum (FPEF) – whose members account for about 90% of fresh fruit exported from SA. “Having recognised this opportunity, we are talking to the authorities and various importers in Russia. We can certainly expand, but must not flood that market.” And already part of the forum’s efforts to grow the established Russian market, there will be an SA stand at this year’s 23rd annual World Food exhibition, Kruger told FTW. This will be held at the Expocentre Fairgrounds in Moscow, from September 15-18. Also, Justin Chadwick, CEO of the Citrus Growers’ Association (CGA), pointed out that Russia was currently the biggest importing nation of SA citrus, receiving about 12% of the industry’s total exports. And, given that other suppliers will now be off the list, he felt there was a good chance of shipments to Russia increasing. But he did also note that the current supply chain to Russia may need to be altered, when he told freshfruitportal.com that the fresh produce industry might have to find other routes “with key European hubs looking like they are no longer feasible options”. Chris Moodie of Fruitways Marketing however pointed to a significant hitch. “Most of the fruit industry is coming to the end of the season,” he told FTW. “And it’s about 3-4 months till the new season starts.” He suggested at the same time that it was likely to be only our early season crops that might be in with a chance of taking real advantage of the ban. “I don’t think it will last a year. Everybody will be trying to sort things out as quickly as possible.” The other flaw he saw was that SA exporters might win with Russia as an increased market, but might also lose out in the other traditional markets as the EU struggles to get rid of its Russian surplus and grabs any buyers it can find.