But Russian fruit merchants say if Russians have more cash to put where their mouth is, fruit exports will recover. The biggest South African fruit exporter to Russia is Capespan, which has a Russian representative in that country and directs the trade from offices in Vienna.
According to Russian customs figures, the aggregate value of South African goods imported by Russia in the six months to 30 June 2009 was US$124,1m, a drop of 37% from a year earlier.
A fruit industry expert says that in the quarter to 31 March, the downturn in demand for South African fruit was 10%. The contraction seems to have accelerated in the second quarter, and will continue, say Russian fruit importers, unless there is a revival in economic growth and consumer income.
Last year, according to the customs figures, fruit was the biggest of SA's exports to Russia, and made up a third of the total export value of $316m recorded in the nine months to September 30. In that period, SA fruit export sales to Russia jumped 34% compared with 2007.
That marked something of a slowdown from the 76% growth between 2005 and 2006.
A source in the South African fruit trade says Capespan and other growers ship apples and pears to Russia in the northern spring, and concentrate on citrus as the winter comes on in Russia. He claims that Capespan's position would be much worse if rival exports from Argentina, Morocco and Egypt had not fallen below the usual level of Russian demand.
Despite sinking Russian consumer incomes, the banana is holding firm, enabling the St Petersburg-based Joint Fruit Company (JFC) to increase its share of sales at the expense of its domestic rivals. With turnover of $500m in 2007 (the latest figure JFC has released), JFC says there has been no slipping of growth in demand and sales of bananas this year, and its Bonanza! brand is expected to turn the crisis conditions to its advantage.
Russians do not eat as much fruit as they should, but the first fruit to break through when the Iron Curtain came down was the banana. With average annual consumption of fruit at just 53kg for Russians — half the US consumer level — this year's loss of real income (in May this was down 20% from the year before) has pushed Russians into cutting their fruit imports, but they are eating more bananas.
The reduction in fruit imports to Russia has amounted to 6% so far this year, says a report by maritime analyst Alexei Bezborodov. The cutback is less than the 41% reduction in imports as a whole, but it marks a sharp reversal in the fruit segment of the refrigerated container (Reefer) trade, which has been feeding 12% annual growth in fruit consumption. This year, according to a market analyst in St Petersburg, the Russian fruit market will shrink 5% overall.
Most fruit enters the country through St Petersburg port, which reported 650000 tons of Reefer cargo processed in the first quarter; that was down 37% from last year.
Bezborodov reports that the trade in bananas will be least affected in the downturn as Russian consumers replace more expensive citrus, apples, pears and grapes from South America and Africa with cheaper fruit.
Roughly one banana in four imported to St Petersburg is produced on a Russian-owned plantation in south or central America — principally Ecuador and Costa Rica.
The banana price is relatively stable, so while Russian food prices are rising by about 1% a month — domestic cucumbers and tomatoes are now costlier than imported bananas — the banana trade is expected to grow as winter approaches.
A South African source says that the Russian price of imported grapes doubled in the first half of this year compared with last year.
The switch to bananas has seen consumption rise 24% in the six months to June, according to a St Petersburg fruit trade survey. JFC, which led the banana importers last year with 220000 tons, is picking up volumes from the now bankrupt Sunway group. Financially, JFC — registered in the British Virgin Islands — would be doing much better if it had not invested its fruit trade profit in speculatively priced commercial property projects in the two years before the crash.
The price factor has meant apples are also holding up in today's Russian fruit market, because of low-priced supplies from neighbouring Poland.
According to a JFC marketing source, “Russians on the whole have acquired a habit of healthy consumption and try not to refuse it completely. But monetary difficulties force them to choose cheaper fruit.
“Thus, the middle-term forecast of consumption completely depends on the situation of the Russian economy. If growth does not revive, we will finish the year with the market volume at a level below last year's, and with an expanded share of inexpensive fruit. In the event of economic growth, we will see a return to ... expensive European and Latin American apples and pears, and good sales of citrus.”
Source: Business Day
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