A blow to the greenhouses: what will the lifting of sanctions against Turkey

As soon as Vladimir Putin has lifted a ban on the sale of tours to Turkey, she returned to his interest of tourists

TEPpersonal terms

Prior to the sanctions, Turkey was the fifth largest trade partner of Russia. Main import article, of course, food, in second place with fabrics and textiles. Russia is also on an industrial scale imports leather and leather products, fur products, shoes.

According to Turkstat, in the first half of 2016, the export of food products from Turkey in comparison with the similar period of 2015 fell to $376,9 million Of which $217 million was accounted for by tomatoes. Prior to the embargo, the Turkish tomatoes were occupied 57% of Russian imports in monetary terms. Completely disappeared the Turkish tangerines, carrots and oranges. In total, these categories in the first six months of last year, had $70.6 million two-thirds, or $33.9 million in monetary terms, imports decreased Turkish fresh apricots, berries, peaches and plums.

Against this background, the domestic agricultural industry has shown an enviable rate of growth. According to the agriculture Ministry, as of 8 August, the gross yield of greenhouse vegetable crops in the whole country amounted to 436,9 million tonnes, which is 20% more than in 2015. The greatest dynamics demonstrated just tomatoes, which were collected 105.4 thousand tons, 55% more than the year before.

“For import substitution needs to increase the production of greenhouse tomatoes and cucumbers of 1 million tons by 2020, or 200 thousand tonnes per year, which will require the construction and modernization over the next five years not less than 2 hectares of greenhouses,” — said the Minister of agriculture Alexander Tkachev on the meeting of the government Commission on agriculture in early July.

The resumption of imports of Turkish food products, however, can seriously damage Russian greenhouse complexes, whose products are more expensive than imported fruit and vegetables, the General Director of Association “Hothouses of Russia” Natalia Rogova. It is estimated that in 2016 in Russia it was planned to build 300 hectares of greenhouses, however, are based only 160 ha. this is Partly due to the delays in the payment of state subsidies for the construction of greenhouses, partly due to the uncertainty of the Turkish question. “If now the market will again proceed cheaper products from Turkey, our entrepreneur will be seriously affected, and the investment in the construction of new greenhouses will stop,” — said Rogov.

Greenhouse owners agree that the return of the Turkish vegetables to the Russian market may be forced to adjust already the companies investment plans in the direction of contraction, although their current business situation, significant effects will not have. “Of course, it is not normal when they say today, closing the border, and tomorrow — that everything is reconciled, open back. Under such changing rules of the game are difficult to engage in strategic planning,” said RBC CEO of a major greenhouse complex in the South of Russia, which preferred to remain unknown.

If returned cheap Turkish vegetables Russian producers will have to revise the pricing policy, predicts the Director General of FruitNews Irina Goat. According to her, Turkey was supplied to the Russian market products in the low price segment, while prices of domestic greenhouse enterprises are higher, primarily due to large expenditures on electricity for heating and lighting greenhouses.

“Even before the ban of import of Turkish products our vegetables were more expensive, but they were a steady demand. In fact, they do not compete with Turkish, were in another price category and was designed for another group of customers”, — said the representative of the Rostov GK “Agrokom” Tatyana Gordina. Now the economy has ceased to grow tomatoes and switched to cucumbers: it is more profitable from an economic point of view, says Gordin.

The Ministry of agriculture has taken a cautious position in relation to the abolition of the anti-sanctions. In July the head of Department Alexander Tkachev has declared “to Interfax” that Russia does not intend “so quick to open its market to Turkish suppliers, and soon the lifting of the embargo will not. The representative of the Ministry of agriculture confirmed that the position of the Agency since then has not changed.

Hard tissue

Turkish textiles under the ban were not included, although at the end of December 2015, the Ministry of industry and trade has proposed the government to introduce a ban on the import up to 80% of light industry goods from this country. The Ministry insisted on a ban first of all in order to create “favorable conditions for our producers, who is able to replace the Turkish products”, explained the Deputy Minister Viktor Evtukhov. The government initiative was not supported, however, according to Turkstat, in the first half of 2015 from Turkey to Russia has imported clothing $93,2 million, over the same period, 2016, the imports of this category decreased by 48%, to $48.4 mln

Decreased imports of footwear and components for its production. Based on the statistics of the FCS of Russia research center for International Trade & Integration estimated that in the first six months of 2016 imports of shoes from Turkey decreased by 68% and skin and accessories by 46%, to $9.4 million and $1 million respectively.

Russian companies alone reduced the import of non-food items, logistics assessing resulting risks. On November 25, 2015, the day after the Turkish military shot down a Russian su-24 in Novorossiysk started to detain goods from Turkey. And the head of the Republic of Crimea Sergey Aksenov said that the regional authorities refuse to cooperate with the Turkish business, the purchase of Turkish goods and maintain the ferry service with Turkey. “No communication with Turkey will not be including the ferry. We are not ready to cooperate with Turkish business,” — quoted Aksenova Agency “RIA Novosti”.

In Novorossiysk, Crimea and the North-West customs (St.-Petersburg) began to accumulate a huge quantity of goods, told Russian businessmen importing Turkish products. Russia has no land borders with Turkey.

The owner of a large chain of Shoe stores had previously told me that in the port of Novorossiysk the cargo with a consignment of shoes from Turkey for his network sent a full inspection, although usually carried out only partially. Although Russian customs officials at the time gave no official explanation, according to the Manager of one of the Moscow firms — importers of Turkish building materials, customs officers were “instructed” to check the cargos from Turkey “in the most rigid mode”.

“The state was preparing for more hard scenario for sanctions against Turkey, with the business meetings were held on a possible ban on supplies and other categories of products, so many are just proactively started to look for new partners and refused to supply from Turkey,” — said the head of one of large Russian Shoe companies.

A complete rejection of orders for Turkish companies said the company Zenden. Now 70% of its products are made in China, the remaining orders are divided by the Russian and Indian enterprises. Founder Zenden Andrey Pavlov has not commented on the possible restoration of trade relations with the Turkish side. But, according to the source RBC familiar with the plans of a businessman, he has no plans to produce shoes in Turkey.

Temporarily abandoned Turkish fabrics and accessories Finn Flare. “We stop working with Turkish suppliers as the situation is changing rapidly and there is a reasonable risk of disruption of the normal production cycle,” explains a company spokesman Artem Chernyshev. Now the company hopes to restore cooperation with suppliers from Turkey. Does not exclude the possibility of placing parts orders for Turkish companies and Vice-President of “Ekonika” Sergey Sarkisov.

The main advantage of Turkey is the huge number of companies keen to work with the Russian market and are ready to offer short run production for delivery in a few days, says commercial Director Fashion Consulting Group of Anush Gasparian: “neither China Nor Bangladesh, nor any other country in Southeast Asia this, of course, give the customer can’t.”

Co-owner of the company — manufacturer of children’s clothes Lucky Child Vladimir Mamut says that the supply from Turkey is normal in April 2016. Earlier, the entrepreneur decided not to refuse orders in Turkish factories, because he couldn’t find enough high-quality raw materials to other countries. “The most feasible alternative was Uzbekistan, we ordered samples, but they were not quality. If entered into force the embargo on fabric and finished products from Turkey, we would not be able to start with Uzbek companies,” says Mamut.

According to the President of the Association of textile workers of Russia Shamkhal Ildarova, today the total volume of Russian market of Turkish fabrics textile is about 20-25%. “When there was a crisis in relations between Russia and Turkey, the Russian manufacturers of fabrics cheered. It’s even evident in the increased number of companies that have decided to join the Association, for the unification and joint coordination,” says Ildarov. In his opinion, the industry came to realize that it is impossible to rely on imports. However, the significant reduction in the volume of Turkish fabrics in Russia at the moment Ildarov not expect. A large amount of Turkish supplies goes through Iran and Azerbaijan.

The cold season

After the ban on tours to Turkey the Russian tourist flow fell 87.4% to 183,8 thousand people, according to the Ministry of culture and tourism of Turkey for the first half of 2016. In June, Turkey was visited by 93% of our compatriots less than a year earlier. Then Russian tourists was 652,7 thousand

On the contrary, the number of tourists in the resorts of Krasnodar region and the Crimea increased significantly. The Ministry of resorts and tourism of Crimea reported the growth of tourist arrivals for the first half of 2016 by 21% to 1.57 million tourists. According to the administration of the Krasnoyarsk territory, the local resorts during the same period, visited by 5% more tourists than a year earlier, or 6.3 million people. The Deputy Governor Veniamin Kondratiev said that the hotels and sanatoriums on the black sea coast is loaded almost 90%, on the Azov — more than 50%.

In Tez Tour company has estimated that Russia could shift at least 20% of the customers who had previously planned a vacation in Turkey. General Director of “Pegas Touristik” Anna Podgornaya says that Russia entered the top-5 trends in the structure of sales of diversified tour operators who have not previously engaged in inbound tourism. He “Pegas turistik” was released on this area in 2015. Positive dynamics of sales Podgorny relates to the fact that tour operators offered package tours market, has allowed us to create a service “from point to point, just as it is done in Turkey. To promote domestic resorts was also conducted numerous promotional tours to travel agents personally met with the hotels and resorts that they have to sell.

However, as soon as Vladimir Putin has lifted a ban on the sale of tours to Turkey, this trend has returned to his interest of tourists. The next day, 1 July, Turkey became the most popular requests of users on the service “Yandex.Travel”, which aggregates the offers from tour operators. For three days, from 29 June to 1 July, the number of requests for tours to Turkey increased four times, told RBC representatives of “Yandex”, without disclosing absolute numbers. At the same time areas such as Crimea and Sochi, began to interest the Russians three times less.

During the week on trips to Turkey, said almost all major tour operators, the previously present on the area. Good sales, however, still hampered by the lack of Charter flights, which, according to tour operators, are 30% cheaper than regular flights. In case of renewal of the Charter market situation will change dramatically.

“It is impossible to develop domestic tourism by banning other directions and depriving people of choice. It should be a systematic work”, — says the representative of the Russian Union of travel industry Irina Tyurina. In her opinion, the infrastructure of Sochi, Anapa and Crimea is not ready for such an influx of tourists. When a government ban on Charter message will be cancelled, many of those who are vacationing this year, domestic resorts, I choose Turkey, says Tyurin as “very much disappointed” level hotel, food and service.

General Director ICS Travel Group Dmitry Shevchenko believes that if the Charter flights to Turkey will be resumed, the number wishing to travel to the Russian black sea resorts may decline in September: “If now all is restored, naturally offers a Turkish hotels will be competitive, and the sea [in Turkey] warmer, and some kind of outflow will be required”. According to Shevchenko, global tour operators specializing in Russian tourism, and the hotels are not affected, because the season ends, but will reduce their profitability. In the first place can suffer hotels and resorts, offering relaxation c high cost of living.

“Active promotion of domestic destinations and the closure of certain areas — these new market conditions — cannot be considered normal and usual for the Russian business. Next year, most likely, will not be such a huge caused by external factors external demand, and the market will begin to return to normal status,” predicts Tamara Black, President of the Alliance of hoteliers of Russia UPRO and CEO of the management company U PRO Management (develops a network of hotels Bregutta in the Crimea). According to its preliminary estimates, the prices of domestic hoteliers have increased this season by 15-20%. The following year, the hotels will form a pricing policy more carefully, I’m sure Tamara Black.