The EU is meeting this week to discuss renewing the sanctions against Russia. Last summer the measures were extended by six months. This period ends in January. Russia introduced additional sanctions against Turkey without concern for the fresh produce sector. The free trade agreement between Russia and the Ukraine expires January 1 due to Ukraine's rapprochement with the EU. Putin increased the minimum wage for 2016, but this is insufficient to compensate for inflation. Iran wants to increase it's fruit and vegetable export to Russia and the Turkish citrus sector predicts that prices will soar in Russia.
EU meets to extend sanctions
This week Europe is meeting to discuss sanctions against Russia. Last summer the sanctions were extended to January 1, 2016. It is expected that the sanctions will be extended until the Minsk deal is completed. On the other hand, attention has shifted to Syria and many countries are pleased with Russia's contribution to the struggle there. Central European countries and the Baltic States do not want to trade the Ukrainian conflict for the one in Syria. The first conflict was the reason for the sanctions. France, Germany and Italy are countries that may be more open to rapprochement with Russia. Donald Tusk, President of the European Council, has asked member states to consider extending the sanctions by six months.
Additional sanctions against Turkey
The Russian newspaper, Kommersant, reported that the Russian government is preparing to extend it's sanctions against Turkey. The newspaper had access to a proposal that has not yet been approved by the government. The additional measures represent a boycott in cooperation with the hospitality sector, the woodworking sector and pilot training. The sanctions would only apply to new contracts. The proposal has not yet been adopted.
Putin raises minimum wage
President Putin recently cut his own salary, and raised the minimum wage (to take effect in January) by 4% to 6,204 rubles (87 dollars) a month. The minimum wage in 2015 was 5,965 rubles (84 dollars) a month. The average wage in Russia was 32,911 (463 dollars) a month. However, inflation is at 14.6% and is expected to remain high next year; which means wages are actually falling by 7.5%.
Putin postpones free trade agreement with Ukraine
President Putin has postponed the free trade agreement between Russia and Ukraine that was to go into effect on January 1st. Since 2011 Ukraine has benefited from duty-free trade with Russia, when the country joined the Commonwealth of Independent States (CIS). Because Ukraine will begin getting trade benefits with the EU starting on January 1st, the arrangement with the CIS will stop.
Lower fines for tax evasion
Starting March 2016 a higher tax for trucks that weigh 20 tons or more will go into effect. Truckers have to pay 1.53 rubles (0.02 dollar cents) per kilometer to use the federal roads. This was introduced in November. This price will double starting March 2016, which has caused a lot of protest from the drivers. Recently, the government reduced the fines for failure to pay. Since November this tax has brought the state treasury 1,468 billion rubles (20 million dollars).
More Iranian fruit to Russia
The Iranian Trade Association in Moscow said that Iran wants to increase it's export of fruits and vegetables to Russia. In addition to fruits and vegetables, meat and eggs could also be exported to Russia. Although, high import tariffs are still a problem for Iranian exporters. Exporters have pointed out the importance of a good logistics network and good storage capacity.
Citrus prices doubling in Russia?
The Turkish citrus sector expects that Russia will have a hard time if the borders are closed, especially with citrus, "Russia will experience some difficult days. They can import citrus from the Americas or China, but the cost will double," says Mehmet Akin Dogan from the Yuregir Chamber of Agriculture. The Turkish citrus sector wants relations with Russia to normalize as quickly as possible because that is better for both countries.
