8 November 2016

Politico: Russia’s boom (farming) economy

Russia hasn’t eradicated foreign products from supermarket shelves, but it has moved toward greater self-sufficiency. The country imported 36 percent of its food in 2013, before the EU’s sanctions and Moscow’s retaliatory embargo. In 2015, that figure dropped to 28 percent. In 2016, according to preliminary data, that fell again to 24 percent in the first quarter and 22 percent in the second.

Where Russia struggles to make up the shortfall — in fruit and dairy, for example — it has scrambled to find new trading partners. Moscow has approved dairy imports from New Zealand and has opened up to Asian dairy investments from Vietnam and Thailand.

Despite the rosy spin from Putin and Tkachev, Moscow is adopting a high-risk strategy. Sanctions, coupled with plunging oil prices, have hit the currency and driven up food prices by 14 percent in 2015. Fruit and vegetables cost on average 22.8 percent more in June 2015 than a year earlier, according to Rosstat, the state statistics bureau.

With local supply available for just three months of the year due to climate and growing conditions, Russia relies on imports for 90 percent of its fruit, according to the country’s agriculture watchdog Rosselkhoznadzor. On average, fruit prices jumped between 30 percent and 50 percent over 2015. The price of oranges shot up 58 percent.

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