Another important USDA FAS report is worth noting this week, the annual deciduous fruit report for Russia. Since Russia is always one of the the world's top importers of deciduous fruit, it is reasonable to pay attention to the market situation.
From the report:
Report Highlights: Russia is the third largest market for fruits in the world in value terms and the number one market for pears. A recovering economy and concurrently improving incomes helped make fruit imports into Russia from countries with relatively stronger currencies and also imports of exotic fruits more affordable so sales have regained their per crisis level. In 2010, fruit production in Russia is forecast to decrease 20 percent due to frost in the South and extraordinary heat and fires in the Central region of the country.
Russian government discontinued federal subsidies for horticultural modernization and as a result the replanting of old orchards has slowed markedly. The United States exported 8 percent more fruit, 30.8 mt, to Russia in MY 2009 (Jul/Jun) valued $22.7 million. Prospects for U.S. produce exports are even better for MY 2010 due to lower crops expected in Europe.
Executive Summary: In MY 2009, Russia increased imports of fruit from 4.9 million metric tons (mmt) in MY 2008 to 5.2 mmt. Fruit import value reached $4 billion, a 5 percent increase above the record set in MY 2008. Growing incomes and continued appreciation of the Ruble spurred spending and made more expensive produce from countries with stronger currencies as well as exotic fruits more affordable.
According to Euromonitor, there is great potential for future increases in fruit sales to Russia. Fruits sales via retail are forecasted to grow as high as 7.3 mmt by 2015. Domestic fruit production is forecast to decrease by 20 percent this year because of frosts in the South and drought and fire in Central Russia. Fruit cultivation in Russia is largely inefficient and produces low yields, leaving significant potential for growth in the future under the right conditions. However, future production will be affected by the Government of Russia’s (GOR) decision to stop paying subsidies for the planting of new orchards.
In addition, insufficient crop insurance and outdated technology will impede the development of commercial horticulture in Russia. Despite that, high demand for quality domestic fruit is motivating the industry to continue making what investments they can in intensive orchards, modern crop protection technologies, and modern storage facilities that will have some impact on future production starting as soon as next season. In MY 2009, Russia imported 30,847 metric tons of American fruit valued $22.7 million, an 8 percent increase in volume. The United States exported 30 percent more apples and 20 percent more pears to Russia compared with the MY 2008 record.
The Western Russian market continues to buy American pomegranates (1,800 mt) and lemons (1,710 mt). American oranges enjoy good sales in the Russian Far East. Russian importers are interested in trying American berries in the coming season. Due to the limited crop of apples and pears in Europe and China, American fruit has even better sales prospects in Russia in MY 2010. The Customs Union Agreement between Russia, Belarus, and Kazakhstan was launched in July 2010. Most rules and requirements for fruit imports into Russia remain unchanged.