Sanctions Update: Food Prices Yet to Drop

The price of fresh vegetables has risen 67 percent over the last year. Photo: Scanpix
8/18/2014 3:28 PM
Category: Economy

Fruit and vegetable prices are yet to drop massively, despite Russian import bans kicking in, Viljade Maailm OÜ head purchaser Maksim Poddujev said.

He told Äripäev today southern European growers have not cut prices despite no longer sending thousands of trucks of fruit and vegetables to Russia each day, but added that prices should become lower soon.

He said he had expected prices to begin dropping a week ago and has so far only seen cheaper Polish apples and fruit and vegetables from Latvia.

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Agriculture Ministry officials and bank representatives met on Friday to discuss the sanctions, with banks saying they are prepared to relax loan repayment conditions for companies worst hit,

Even a short-term drop in milk prices could force farmers into bankruptcy, Eerika Vaikmäe-Koit, of SEB, said, adding that repayment deadlines could be extended or payment breaks allowed, or both.

No company has yet asked for financial help, and none has absorbed major losses yet.

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The EU has announced 125 million euros in aid to farmers. The new compensation scheme covers produce such as tomatoes, carrots, cabbage, peppers, cauliflower, cucumbers, mushrooms, apples, pears, berries, grapes and kiwi fruit.

The concerns and the EU move stem from Russia's announcement a week and a half ago of a one-year import ban on meat, fish, dairy products, fruit and vegetables from the EU, the US and a few other nations.

The Financial Times reported that Lithuania, Poland, Finland and Denmark each face losses running into hundreds of millions of euros.

 


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