During talks in Sochi last week, Russian President Putin and
Turkish President Erdogan agreed to lift almost all the restrictions on
bilateral trade between the two countries.
During the meeting, Putin said the Russian embargo on
Turkish tomatoes would remain, explaining that it is in the interest of Russian
farmers.
"Our agricultural producers had taken out large loans
and credits. This is a rather long production cycle, which in our climatic
conditions is related to the construction of greenhouses," the Russian
leader explained while Russia’s Deputy PM chipped in saying the
tomato embargo may continue for another three to five years.
So, it looks like I hit the nail on the head last week when
I suggested the reason why Russia is standing firm on Turkish tomato imports is
because finance for construction of Russian glasshouses is already committed.
Not entirely sure how this sits with WTO rules but as no one
seems to pay any attention to the WTO it probably doesn’t matter anyway.
Currently the Russian harvest of greenhouse vegetables
stands at 200kmt which is 80% more than last year so I think Russia’s policy on
vegetable production, in particular tomatoes, is fairly clear for the next few
years at least.
Before the introduction of the restrictions, Turkey was the
largest supplier of tomatoes to Russia, presumably those Turkish tomatoes will now
be seeking a new home elsewhere, possibly in the EU so watch out for the knock-on
impact on tomato producers elsewhere.