Russia's ban on the importation of European potatoes made importers turn to Egyptian, Moroccan and Pakistani shippers. Lifting the ban would make it difficult for importers, because it could disrupt the market as importers switch back to European supplies.
“We're following the situation closely,” said Mohammed Mohammedli of Akhmed Fruit Company in Russia. “Because as soon as we feel a resolution is coming, we have to react.” For now, much of the demand for potatoes has been filled by supplies from Egypt, Morocco and Pakistan, and that's been a boon for exporters in those countries. For example, Mohammedli estimated that shipments of potatoes from Egypt to Russia have doubled this season, and the benefits of that could extend to after the ban is lifted.
“Some European shippers could lose the customers they've had over the years,” said Mohammedli. “This situation has opened new possibilities for Pakistani or Egyptian exporters to pick up new business.” While a good portion of that shift from European suppliers could continue after the ban – Mohammedli suggests that about a fifth of that shift could stick – most Russian importers will switch back to European shippers once European potatoes are once again allowed into Russia. But that move back to the status quo will bring problems with it.
“A lot of importers have big clients they need to take care of, so they are buying lots of potatoes that will last them through March and April,” said Mohammedli. “It takes three or four weeks to ship potatoes from Egypt and Pakistan to Russia, so they're going to have supplies well into April.” He explained that if, for example, the ban were lifted tomorrow, Russian importers would be sitting on two months' worth of potatoes in addition to any new supplies suddenly available from Europe. With European supplies allowed into the Russian market once again, European shippers would offer competitive prices in order to get back into the market, and that would make for a glut in supplies and increased competition between European and Egyptian suppliers. That leaves importers like Ahkmed Fruit in an uneasy situation, where they must continue the shipments of Egyptian and Moroccan potatoes while still accounting for the inevitable point when they'll switch back to European shipments.
“We've stopped receiving shipments in St. Petersburg, because it takes too long to reach,” said Mohammedli. “We get shipments where it doesn't take so long, that way we can react quickly when things change.”
