CARGO volumes through St Petersburg have fallen in recent months as sanctions to and from Russia over its military action in the Crimea harms trade on both sides of the dispute.
Russian imports drop as sanctions bite both sides, recession now threatensCARGO volumes through St Petersburg have fallen in recent months as sanctions to and from Russia over its military action in the Crimea harms trade on both sides of the dispute.
"All categories have experienced a steady decline as the sanctions bite," Mortrans logistics chief Geoff Edwards told Lloyd's Loading List.
The Port of St Petersburg will face a weak fourth quarter, with the Russian economy showing signs of recession, he said.
"Project and out-of-gauge cargo has decreased markedly but is expected to pick up once the Arctic Ridge oil and gas project gets underway," he said.
Mr Edwards said that would require a lot of cargo arriving from South East Asia rather than from the traditional US and Canada suppliers, which have imposed sanctions against Russia.
Based in St Petersburg, Mr Edwards said perishables, which come in overland by truck, were drying up, and there was evidence in local supermarkets of a lack of choice and quality as they run out of fresh produce.
This has also impacted European fruit and vegetable producers, who were promised EU assistance to stave off a price collapse after Russia's ban on Western foodstuffs, Reuters reported in August.
The US, Canada, Australia, Norway and the EU have been hit with Russia's one-year embargo on meat, fish, dairy, fruit and vegetable exports.
EU farmers say that an oversupply of produce will bring about a price collapse in the European market. The EU has a EUR420 million (US$562 million) fund to compensate producers for sudden market distortions.
The EU had already announced support for peach and nectarine growers, increasing the amount of surplus that can distributed free while compensating producers financially. This will be applied to tomatoes, cucumbers, peppers and mushrooms.
Poland is suffering from the loss of its biggest apple buyer and France, the bloc's leading agricultural economy, fears that the hundreds of thousands of Polish apples Russia does not import will flood French markets.
With the ruble losing ground, Russians are paying more for imports. "There's certainly been a marked increase in local prices for imported goods and the government is keeping an eye on Russian companies looking to take advantage of the situation," he said.
"But there are many major projects in the pipeline to bolster economic activity in the country, albeit they may be a smokescreen," he said.
"Remember, there's the huge oil and gas find on the Arctic Ridge which is slightly complicated as it was discovered in conjunction with [US corporation] Exxon-Mobil! But I don't see a major recession."
