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Aug 19, 2022
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Russia is going to flood Europe with cheap tomatoes

Domestic greenhouse vegetables are ready for export march to Europe. This follows from the statement of the head of Rosselkhoznadzor Sergei Dankvert. According to the official, in the EU countries, greenhouse vegetable growing is becoming unprofitable and economically uncompetitive due to high energy prices. In Russia, it is intensively developing, which means that it remains only to arrange supplies to neighbors on the continent.

In 2021, Russia supplied 2.5 thousand tons of cucumbers alone to Europe, including to European countries. And now there are obstacles in the form of transport restrictions and more expensive logistics: if a car used to cost €3–3.5 thousand, now €12 thousand, Dankvert noted. Meanwhile, such volumes pale in comparison with the 5.5 million tons of fruit and vegetable imports that, according to the Rosselkhoznadzor, entered the Russian Federation in the seven months of 2022.

In terms of price, the picture is also indicative: in 2021, Russia sold vegetables for $818 million abroad, and, for example, grains for $11.092 billion. These were mainly potatoes, cucumbers, tomatoes, onions, carrots, white and cauliflower, legumes . The largest recipients were Turkey, Pakistan, Italy and Belarus.

“The statement of the head of the Rosselkhoznadzor is largely situational: Europe is now experiencing an abnormally hot summer, which leads to problems with the maintenance of local vegetable growing, in particular greenhouses,” says Nikita Maslennikov, a leading expert at the Center for Political Technologies. – But these are temporary difficulties, and I would not argue that they are seriously and for a long time knocking out the greenhouse industry of the EU. The Europeans will certainly cope. Naturally, in the autumn-winter period, maintaining greenhouses is a much more expensive pleasure. Especially given the predicted gas prices of $4,000 per thousand cubic meters.”

But is Russia itself capable of drastically increasing the export of vegetables, even to other regions? Some time later – perhaps, but right now – hardly. The industry is still dependent on the supply of imported seeds, equipment, technologies and materials, with which there are problems. For example, greenhouses require a special coating that transmits ultraviolet rays. Another question – where to sell? Vegetables are a delicate, perishable commodity, which means that it is necessary to build routes that will quickly bring it to end consumers. It can be stored in packages for a week and a half. Accordingly, Maslennikov argues, the circle of potential recipients narrows to Turkey, Kazakhstan, partly Kyrgyzstan and Belarus. Tajikistan, which has three plentiful crops of open-ground tomatoes a year, does not need our greenhouse tomatoes for nothing.

Anatoly Tikhonov, director of the Center for Agribusiness and Food Security at the Higher School of Corporate Management of the RANEPA, looks at things differently. Now, according to him, in Europe the refrigerator will dictate its conditions. Agricultural products are becoming more expensive due to drought, fires and the consequences of economic sanctions against the Russian Federation. Outdoor vegetables are dying. In Italy, the decline in production for various agricultural crops reaches 45%, throughout the EU, large losses are expected for sunflower, olives, potatoes, melons. Under these conditions, it is highly likely that the Europeans will have to ask Russia for the supply of part of the crop. Politicians can turn a blind eye to this, and businesses will bypass sanctions and buy food to feed the population and reduce social tensions amid high food inflation.

“Last year we received more than 1.4 million tons of vegetables, we fully provide ourselves with cucumbers, about 80% with tomatoes. There are 400 greenhouses operating in the country, 50 more are under construction,” says Tikhonov. And we have a surplus for export. The greenhouse works either on the sun or on additional artificial lighting and heating. In Europe, energy prices are prohibitively high, mineral fertilizers used in greenhouses have risen tenfold in price, and the purchasing power of the population is declining. Against this background, Russian products will be quite competitive and will be able to replace the falling volumes of European production.”

Russia has all the resources (from land and fertilizers to interested farms) to saturate the European market with its vegetables, says Mikhail Oganezov, a specialist in the strategic research department at Total Research. In his opinion, the factor of sanctions does not play a special role, since food products, with rare exceptions, are removed from restrictions. So theoretically, deliveries can be started even tomorrow. However, in order to increase exports, it is first necessary to completely solve the problems of domestic consumption. As Oganezov notes, imported tomatoes and cucumbers are still brought to Russia, while there should be a reserve of our own products – with proper attitude and investment. But in the north-east of the country, these vegetables are 3-4 times more expensive than in Moscow, St. Petersburg and other megacities.

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