How About Them Apples?

On July 30, Moscow blocks Polish fruit, veg imports, mulls EU ban citing "systematic violations of international and Russian phytosanitary requirements".

Everyone understands this was retaliation for further EU sanctions on Russia.

Russia has slapped a temporary ban on fruit and vegetable imports from Poland, claiming the products breach its standards.

Rosselkhoznador, the country's federal veterinary and phytosanitary control agency, issued a statement yesterday (30 July) saying it is to introduce a ban on several Polish fruit and vegetable products after it discovered "systematic violations of international and Russian phytosanitary requirements".

"Rosselkhoznadzor considers it necessary to introduce from 1 August 2014 as a temporary emergency phytosanitary measures restrictions on imports to Russia from Poland and Polish imports through third countries," the Russian food safety body said.

Items affected include apples, pears and quince, apricot, cherries, plus all vegetables except mushrooms.

In an interview with Reuters, a spokesperson for Rosselkhoznador said the move "was part of a VPSS plan to consider restricting all or some fruit imports from the entire EU". However he denied the restrictions stemmed from the EU sanctions.

Bloomberg had reported Russia was also mulling the ban of chicken from the US, which has joined the EU in imposing sanctions on parts of the Russian economy.

Revenge

Reuters reports Russian ban on Polish produce is revenge for EU sanctions

Moscow, which buys more than 2 billion euros worth of EU fruit and vegetables a year making it by far the biggest export market for the produce, said the ban was for sanitary reasons and denied a link to the sanctions.

Moscow has frequently been accused in the past of using food safety inspections to restrict trade from countries with which it has political disputes. The EU said it was studying the announcement, describing it as a surprise.

"The embargo amounts to political repression in response to the sanctions imposed by the European Union against Russia," Poland's agriculture ministry said in a statement.

According to European Commission figures, the EU sold Russia 1.2 billion euros worth of fruit and 886 million euros worth of vegetables in 2011, accounting for 28 percent of the bloc's exports of fruit and 21.5 percent of its vegetables. For some EU countries, including Poland, the percentages are even higher.

Poland is the largest exporter of apples in the world. In 2013 it exported apples worth 438 million euro ($587 million), of which 56 percent went to Russia, according to Poland's Ministry of Agriculture.

"I'm expecting the Polish apple producers to suffer," Witold Boguta, representing Poland's Association of Fruit and Vegetable Producers, told Reuters.

Surprise?

If EU bureaucrats really were surprised by this, they are stupider than I thought, which is saying quite a lot.

Why anyone should be surprised by this is a mystery. Retaliation should have been widely expected.

Poland Mocks Russia's Ban on Polish Fruit

In response to the ban, Poland Mocks Russia With Eat More Apples Campaign.

The produce ban is expected to affect Polish apples more than any other product. Poland is Europe’s largest producer of apples, with more than half of its production going to Russia.

The "Puls Biznesu" newspaper called on Wednesday for a show of support for Poland's apple producers, urging people to eat more apples and to drink cider. Poles responded with humorous posts on Twitter under the hashtag #jedzjablka – Polish for “eat apples”.

One Twitter user predicted that half of Warsaw would get drunk on cider over the weekend.

“An apple a day keeps Putin away!” wrote another Twitter user, in a reference to the Russian president.

Poland is only the latest in a series of countries that Russia has targeted with import bans. Russia announced on Thursday that it would ban the import of soy products, cornmeal and sunflowers from Ukraine. The move comes following bans on Ukrainian dairy products and canned foods that were imposed in recent days.

Russia has a history of banning imports from the countries it is in disputes with, usually citing safety concerns or violations. Last year it blocked the import of Ukrainian chocolates made by the company owned by candy magnate Petro Poroshenko, a pro-Western politician who is now Ukraine’s president.

Earlier this month Russia blocked the import of Moldovan fruit after the country signed an association agreement with the EU. And it banned shipments of Georgian wine and mineral water just before the 2008 war with Georgia over South Ossetia.

Eat Apples  

Poles may get drunk on cider for a week or two while eating more apples than usual. Then what?

The Population of Russia is about 146 million. The Population of Poland is about 37 million. Polish will have to eat about 4 times as may apples per person as they used to.

Assuming that happens (which it probably won't beyond one week at most), at what price? Poland is going to have a lot of apples it will not know what to do with.

The Ukrainian economy is in ruins over the war and the collapse in trade with Russia as the cry from President Obama and Senator John McCain for for more sanctions on Russia grows.

Sanctions are not not very bright.

No one wins in a trade war. And Europe is about to find out in a big way.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com