Russian apple import market continues to expand

Published 2021년 2월 26일

From 2014 to 2018, apple imports to the Russian market decreased by 24%, going from 1.13 to 0.87 million tons due to their fruit and vegetable embargo and the ruble’s devaluation. In 2020, apple imports in Russia showed signs of a very positive recovery and started their way back to a USD 800 million trade flow in 2013.

Since 2020, Russia has started to show signs of a more dynamic market in its fruit sector. The imported value of apples into Russia for the 2019/2020 season was USD 495 million, increasing significantly from previous years. Moreover, Russia went back to be the world’s largest apple importer in volume terms importing 750,000 tons, making them an important market for the apple sector.

A Damaging Embargo Period

By far, the country most affected by the Russian embargo was Poland, which in 2014 was the leading supplier of apples to the Russian market with a share of 37.1%. After introducing the counter embargo, Serbia became the key importer with a share of 51.4% and caused a collapse with Polish farmers that dropped the price by 50%. Poland went from an export value of USD 338 million to nothing by 2018.

Another country affected by Russian sanctions in 2016, within the same decreased period, was Turkey. After Turkey downed a Russian fighter jet violating its airspace, Russia banned imports of Turkish fruits and vegetables, including apples, causing another collapse on Turkish apple exporters. They went from an exported value of USD 14 million in 2015 to nothing by the next year.

Source: ITC Trade Map, Tridge

Unlike what happened to Poland, Russia relaxed trade sanctions placed on Turkey during the summer of 2017, which experienced a significant recovery by 2018, accounting for USD 37 million in exports. By 2019, new Turkish apples’ restrictions were set, and export again went down by 80%.

Drop-in Russian Production

According to the Fresh Deciduous Fruit Annual 2020 USDA report, for the 2019/2020 season, the area planted for apple cultivation in Russia was 193,790 hectares. This is an increase of 1.6 % from the previous year, harvesting an estimated 1,088,600 MT of commercial apples. In the 2020/2021 season, the planted area under apple cultivation is forecast to increase by 2%, to 197,600 hectares. However, commercial apple production is projected to decline by 15% to 910,000 MT due to early-spring frosts and hail in the Southern and North-Caucasian Federal District, where 75 % of the Russian commercial seed fruit crop grows.

Despite government efforts, Russia continues to be dependent on imports of fresh apples since the volume of these fruits grown in Russia is insufficient to satisfy domestic demand. Especially in the high-quality apple segment, the current Russian trend to eat healthily has led to increased fruit consumption.

The apple prices in Russia have been dependent on imports rather than on the supply of domestically produced apples, which have been drifting the price to a constant fluctuation in recent years.

Rise in apple imports to Russia

Russia is the world’s largest apple importer in terms of volume. In the 2019/2020 campaign, imports decreased by 5% YOY to 750,572 tons but were up 15% in value. From July to August 2020, imports increased by over 20%. This trend is expected to continue in the off-season, as local production is less available during the winter and spring season.

The three leading suppliers of apples to Russia for 2020 were Moldova, with an export value of USD 123 million (%28), Serbia at USD 117 million (19.6%), and Azerbaijan USD 37 million(9.6%). There is a clear trend over the last two periods of Moldova and Serbia losing part of their share market, as countries like Turkey, New Zealand, and Kazakhstan are returning to the market.

Source: Trade Data Monitor

Turkish exports have shown a considerable improvement in their exports to Russia in the 2019/2020 season, making a comeback on what once was a trade flow of USD 32 million back in 2018. For the 2019 season, Turkey decreased its exports by a substantial USD 8 million, as Russia imposed new sanctions by the end of that year.

In 2020/2021, Russian apple imports are forecast to increase by 8%. Whether the import numbers for apples in Russia will reach the value numbers of 2013 remains to be seen. However, the commercial apple supply in Russia is still set by importers, with a more significant diversification of the share market.

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