Thursday, 11 May 2017

Russia continues to protect its tomatoes

During talks in Sochi last week, Russian President Putin and Turkish President Erdogan agreed to lift almost all the restrictions on bilateral trade between the two countries.

During the meeting, Putin said the Russian embargo on Turkish tomatoes would remain, explaining that it is in the interest of Russian farmers.

"Our agricultural producers had taken out large loans and credits. This is a rather long production cycle, which in our climatic conditions is related to the construction of greenhouses," the Russian leader explained while Russia’s Deputy PM chipped in saying the tomato embargo may continue for another three to five years.

So, it looks like I hit the nail on the head last week when I suggested the reason why Russia is standing firm on Turkish tomato imports is because finance for construction of Russian glasshouses is already committed.

Not entirely sure how this sits with WTO rules but as no one seems to pay any attention to the WTO it probably doesn’t matter anyway.

Currently the Russian harvest of greenhouse vegetables stands at 200kmt which is 80% more than last year so I think Russia’s policy on vegetable production, in particular tomatoes, is fairly clear for the next few years at least.

Before the introduction of the restrictions, Turkey was the largest supplier of tomatoes to Russia, presumably those Turkish tomatoes will now be seeking a new home elsewhere, possibly in the EU so watch out for the knock-on impact on tomato producers elsewhere.