Russia is Looking to Diversify its Potato Imports

Published 2021년 12월 18일

Throughout 2021, Russia has been facing a potato shortage as heavy rains in major potato-producing regions negatively impacted the harvest volumes. The shortage induced a hike in the price of potatoes and forced Russia to rely on imports from different countries. Russia struggled with limited sources to import potatoes due to several import bans and turned to potato imports from nontraditional sources like Iran and Georgia. Potato prices in Russia are expected to continue on the same upward trend even in 2022 as expectations from the upcoming harvest remain low.

In 2021, Russia witnessed rainfall across the potato growing regions which resulted in affecting the potato crop and reducing the harvest volumes, and this shortage eventuallyresulted in an increase in domestic prices.Russia could meet the high demand in the domestic market through potato imports throughout 2021, however, the country had limited sources to import from due to certain trade bans. The country had placed a ban on the import of potatoes due to sanitary and phytosanitary reasons from large and traditional markets like the EU, Pakistan Ukraine, and the United States resulting in limited import options.

Source: ITC Trade Map. HS Code: 070190 Fresh or chilled potatoes (excluding seed).

Traditionally, Russia imports potatoes from Egypt, Azerbaijan, Belarus, the Netherlands (currently banned), and Pakistan to meet its domestic demand. As of the second week of December 2021, Russian supermarket chains have started placing orders for potatoes from Egypt. The volume of orders is very high in comparison to the previous seasons and Egypt itself does not have enough supply to meet the gigantic demand. The situation is not expected to improve in the coming months as the Egyptian farmers have reduced the area planted with “winter potatoes” which will reduce the volume of potatoes due to be harvested in January-February 2022.

With all the barriers and limited supply of leading potato suppliers, Belarus has come to rescue Russia by exporting relatively larger volumes of potatoes to the country. As the year passed, the volumes from Belarus also started to reduce due to a shortage of potatoes in Belarus itself. Belarus's decision to ban the imports of fruit and vegetable products from the EU from January 1, 2022, has also resulted in a shortage in the Russian market as many of these goods were re-exported through Belarus to Russia. Finally in October, Russia started importing potatoes from new and unconventional suppliers like Iran and Georgia as traditional suppliers faced shortages.

Given the trade dynamics in Russia is witnessing, the supply of potatoes in the country is likely to remain uncertain in the coming months. Potato prices throughout 2021, were in sharp contrast from the usual trends and have again started to rise sharply. On 13th December 2021, the potato prices in Russia recorded a high of USD 0.66 per kg which is 47% higher than the price in December 2020 and 10% more than the price on 15th November 2021. The prices are expected to increase even more in the coming months due to the existing potato shortage and low expectations from the coming 2022 harvest.