The following information is coming from Vedomosti publishing house. The Ministry of Economic Development of the Russian Federation proposed to the Ministry of Agriculture to abolish quotas on tomato imports from Turkey taking into account market conditions and asked the Ministry’s experts to assess the possible consequences of such a measure for the domestic producers.
This is what was stated in the minutes of the session of the Commission on Protective Measures in Foreign Trade, held on June 23. The Vedomosti has received confirmation of the document content from the representatives of the Ministry of Agriculture. The Russian agrarians, including ECO-culture management, have expressed concern that such a measure can blow back on domestic business.
The import restrictions on products from Turkey were introduced in January 2016 after a Turkish air force fighter shot down a Russian bomber on the Syrian-Turkish border. At first, Russia has completely banned the import of fruits and vegetables from Turkey but later on, the restrictions were gradually removed. Since November 2017, it was allowed to import no more than 50 thousand tons of vegetables into Russia, while tomatoes (the most important export product for Turkey) remained completely banned. Since February this year, the volume of shipments allowed has reached 200 thousand tons.
Before the sanctions were imposed, Turkey was the largest supplier of tomatoes to the domestic market, and Russia was among the main buyers. Today, Russian producers provide half of the volume of the Russian domestic market.
Alexander Rudakov, the President of ECO-Culture holding, believes that the abolition of quotas may seriously undermine the Russian vegetable business. Other representatives of large agrarian enterprises concurred with this opinion.
Meanwhile, the import restrictions have become a stimulus for the progressive development of the domestic market. Once permitted, the import of vegetables will reduce the profitability of Russian production and lead to a dangerous drop in wholesale prices. At the moment, the weakening of the rouble has increased the cost of production by 10 per cent, whereas domestic enterprises have to pay the loans – the abolition of quotas in this situation will have a negative impact on the economy of Russian companies and may lead to the bankruptcy of some greenhouse complexes.
The representatives of the Ministry of Agriculture believe that the issue of changes in the volume of supplies can be considered only after the current quota is fully collected.
For the full version of the article, please visit the Vedomosti website.