Russia approaches Turkey to reduce food prices

PINAR ÇELIK NACAR
ISTANBUL
Published 23.04.2016 00:55
Updated 23.04.2016 00:56

In the aftermath of the Turkish Air Force downing a Russian jet over the border with Syria, Russia issued an embargo on all fruit and vegetables coming from Turkey due to a "hygiene issue." When prices for many staple foods in Russia went through the roof, Russian Federal Service for Veterinary and Phytosanitary Surveillance (Rosselhoznadzor) Vice President Aleksey Alekseyenko invited Turkish officials to discuss technical issues regarding the export of fresh fruits and vegetables. Previously made verbally and rejected by Turkey, Russia's request to discuss the exports was later approved when Russia made the request in writing on April 26. Explaining that the country entered a recession after relations with Turkey soured, Food Agriculture and Livestock Minister Faruk Çelik asserted that Russia had acted impulsively concerning this matter. "Turkey has been exporting to Russia for ages. Whatever issues come to the fore, our technical crew will discuss them at the table." Çelik said.

Russian officials interpreted this move as a back step by the exporters. Mediterranean Fresh Fruits and Vegetables Exporters' Association Chairman Ali Kavak said that everyone hopes the relationship between the two countries will return to normal. "We interpret such a request in a positive way. A new embargo has been placed on a product every month. That's why this meeting is so important. We pray that tensions will ease," Kavak said.

The price of one tomato reached TL 6 ($2.12) in Russia on Jan. 1, 2016. Increasing imports from the Czech Republic, China, Poland and the Middle East, Russia has not been able to stem the increase in prices due to logistics costs and expanding legal procedures.

Russians spent 50.1 percent of their income on food in February. The price of tomatoes increased 5.2 percent in April, and fruit prices increased nearly 20 percent over the past four months. Since the price of food has the greatest effect on inflation, Russia has begun to seek a rapprochement with Turkey.

Russia's central bank announced that it expects inflation to come in at around 6.0 percent in 2016, which will bring the country closer to its 4 percent target for 2017. However, a panel of analysts surveyed by Focus Economics does not conform to the central bank's outlook. Panelists see inflation at 7.4 percent for 2016, falling to 6 percent in 2017. With an economy depressed by tumbling oil prices and Western sanctions, the International Monetary Fund (IMF) forecasts in its latest World Economic Outlook report in April that the Russian economy will not grow in 2016, but contract 1.8 percent. In 2017, the IMF foresees modest growth of 0.8 percent.

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