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Russia bans imports of mandarins from Turkey: analyzing the consequences (updated)

Today, the Russian Rospotrebnadzor, unexpectedly for many market participants, has banned the supply of fresh mandarines from Turkey , using as an excuse the exceeding of permissible levels of the pesticide Chlorpyrifos in just one batch of Turkish citrus fruits.

Later, the Ministry of Agriculture of Turkey, explained that the ban applies to only one company, however, the wording on the Rosselkhoznadzor website is not very clear, and no explanations have yet been received from the official bodies of the Russian Federation.

Therefore, it is necessary to wait for official explanations, and further information in our article will relate to the scenario with a complete ban on the supply of Turkish mandarins to the Russian market.

Experts of the produce market almost immediately called this decision politically motivated. Indeed, even in the text of the resolution itself, there is no question of systematic violations, but only a reference to one batch of products is given. At the same time, in 2020, Turkey supplied more than 370 thousand tons of mandarines to Russia, i.e. more than two thousand tons of batches! Rosselkhoznadzor in the world has a solid reputation as a body that is used by Russia as a convenient tool for political pressure on countries that depend on the exports of food products to the Russian market. However, this time the ban was issues by another organization – Rospotrebnadzor, which has made it even more confusing.

EastFruit analysts draw attention to the time of the introduction of the ban – now a period of peak harvesting of mandarines begins in Turkey, and the peak of exports deliveries traditionally falls in the pre-New Year weeks. Last year, Turkish suppliers received $ 270 million in revenue from the exports of mandarin to Russia, increasing their revenue by one and a half times compared to 2019. Obviously, the ban for Turkey will be a serious problem and will lead to a sharp decline in export earnings.

Russia is Turkey’s main market for mandarin – 52% of all citrus fruits in this category were supplied to this market in 2020. This is four times more than for the markets of Ukraine and Iraq. Accordingly, it will be very difficult for Turkish fruit exporters to find an alternative to such a market located so close.

Will Russia be able to find a replacement for Turkey? Mandarines are not grown on a commercial scale in the Russian Federation.

Morocco is the second largest supplier of mandarines to Russia after Turkey, but provides only about half of the volumes that Turkey supplies. It will not be easy to increase this volume significantly, since Morocco has contracts for the export of mandarin also to the EU countries and is actively increasing the exports to Canada, Middle East and Africa.

Georgia, although it increased its mandarin harvest in 2021, has issues with the caliber and quality . In addition, a small country like Georgia does not produce the same amount of tangerine that Turkey usually supplies to Russia. Therefore, Georgia is unlikely to be able to replace Turkish products.

Pakistan, the next in the ranking of suppliers of mandarin in the Russian Federation, is very far away. In addition, there will also not be too much available products for deliveries to the Russian Federation. it is not the “richest” of the possible markets.

It is obvious that if this ban is not lifted in the near future, prices for tangerine in Russia may rise sharply. They are already at a record high level in recent years, which negatively affects consumption.

A further rise in prices for mandarin in Russia, of course, will lead to the mobilization of additional imports from Morocco, Pakistan, Egypt, Israel and even China, but will not fill the vacuum. Accordingly it will push the prices of other citrus fruits up and their consumption could drop sharply, given the lack of prospects for real growth in the incomes of the population of the Russian Federation.

By the way, this is good news for apple exporters to Russia and local growers. High citrus prices will undoubtedly help them draw attention to their fruits, which are currently not in high demand. Generally speaking, apple prices in Russia are now at their lowest level in three seasons and lower than last year’s by an average of 20-30%. Perhaps the situation with the ban on the supply of mandarin from Turkey will allow these prices to rise. True, Russian consumers are unlikely to be happy about this fact because the consumption of fresh fruits in the country is already at a relatively low level.

EastFruit

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