Page 85 - bne IntelliNews Russia Country report May 2017

9.1.6 Agriculture sector news
Russian grain exports to Turkey are to be resumed which is supportive for domestic prices. Following a meeting between Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan on May 3, the recently imposed trade restrictions could be eased significantly. Among the prime beneficiaries are Russian grain exports to Turkey, which are likely to return to the non-tariff list. Since 15 March, Russia has been excluded from the list of countries that can export grain and sunflower oil without tariffs (130% and 36%, respectively) to Turkey. As a result, flows to Turkey dropped to 86,000 tonnes in April (from 360,000 tonnes in March).
Ankara has proposed that Moscow lifts its ban on imported Turkish tomatoes during periods when Russian growers are unable to produce their own, a Turkish official told Reuters on May 26. Russia and Turkey have been negotiating for the removal of remaining trade restrictions Moscow imposed after the Turkish air force downed a Russian bomber jet near the Syrian border in November 2015. Russia has lifted many of the restrictions but the ban on the import of tomatoes has remained in place. Turkey’s tomato exports to Russia stood at $259mn in 2015 before Moscow introduced the ban late in the year.
Russian PM Dmitry Medvedev has signed a decree on lifting restrictions on imported Turkish dunghill-hens and turkeys, fresh and refrigerated cucumbers and cornichons, fresh apples, peaches, grapes, and wild strawberries and strawberries , TASS reported on June 2. Medvedev’s decree also removed the ban on certain operations and services to be provided to Turkish companies active in Russia. On May 22, Turkey and Moscow signed an agreement to bilaterally lift remaining trade restrictions that were introduced after the Turkish air force downed a Russian bomber jet near the Syrian border in late 2015. On May 31, Russian leader Vladimir Putin signed a presidential decree that ended restrictions on operations of Turkish companies in Russia as well as the ban on the employment of Turkish nationals in the Russian Federation. On June 1, Russian Agriculture Minister Alexander Tkachev announced that the Ankara government has lifted restrictions on supplies of Russian wheat.
According to the Federal Agency for Grain Safety and Quality, Russia exported 33.6mn tonnes between the start of the marketing year in July and early April , with Turkey becoming the second largest purchaser, with a 15% share. The reduction in exports was negatively received by the domestic market and raised concerns about oversupply after last year’s record high harvest and the material build up in ending stocks.
As a result, the prices for third and fourth grade wheat were down 6% y/y and 16% y/y in April , after the falls of 2% and 15% in 1Q17. The resumption of grain exports to Turkey is positive for the supply-demand balance for grain in Russia, as well as for domestic grain prices.
Turkey resumed taking Russian wheat exports on May 8 , Turkish Economy Minister Nihat Zeybekci told Reuters on May 11. Moscow imposed a ban on agricultural product imports from Turkey after the downing of a Russian jet by the Turkish air force in November 2015. It then eased some of the restrictions after relations between the two countries started to improve last year, but bans
85 RUSSIA Country Report May 2017 www.intellinews.com