With the EU's confirmation of an extension to economic sanctions on Russia through to the 31 January 2017, following on from an announcement by Russian authorities to prolong its embargo on EU food products for the next 18 months, Freshfel has called on both sides to maintain a dialogue in a bid to restore business.
The association said that it regretted the on-going political dispute, which has severely hit the fresh produce trade, noting that the introduction o Russia's ban in August 2014 has impacted on an export volume of 2.5m tonnes of fruit and vegetables worth more than €2.2bn – corresponding to roughly one-third of the total burden of agri-food products originating in Western European countries affected by the embargo.
"Freshfel therefore calls upon the European Commission, to maintain the dialogue with the Russian authorities to preserve the opportunity to restore business as fast possible for fresh produce," the group noted.
The Russian embargo on European food products had far reaching implications on the EU and the international fresh produce market. In particular the trade in apples, pears and tomatoes has suffered severely from the loss of a key market.
For apples alone, EU exporters have effectively lost a market that imported 790,000 tonnes of the fruit annually.
The embargo does not only have an impact on exports, but it has also led to high price pressure for the most affected commodities in the internal market. Moreover, the sanctions continue to deprive Russian consumers access to European fresh produce, which was increasingly demanded in the years prior the ban.
When the embargo was introduced, the sector welcomed the immediate response of the European Commission, providing exceptional measures to counterbalance the effects of the interrupted trade relations. Unfortunately, the measures had only limited effects.
Some free distribution benefits, being part of the recovery package, are now generating new indirect market difficulties. Free distribution to charity is the main destination of distribution of surplus volumes within the exceptional scheme, but free access to the distributed products for the consumer influences commercial opportunities for the operators.
With the beginning of the third season under embargo, even less budget will be available for the year to come. Freshfel engages frequently with the European Commission to reinforce the efficiency of the exceptional measures scheme for the benefit of the sector.
Besides managing the economic challenges caused by the ban, EU exporters have made great efforts to diversify their export destinations. Gaining access to new third country market has however proved itself as a time-consuming, technically complex and costly procedure. Volumes to newly opened markets remained small compared to the significant trade that was previously in place with Russia.
Freshfel Europe therefore stresses the importance to maintain dialogue with the Russian authorities to progressively restore business, which is also affected by the volatile economic circumstances in Russia. The association further urges the European Commission to also continue to improve the efficiency of its exceptional measures and to continue to facilitate market access to third countries.