Moscow. November 27. The crash of the su-24 is threatening to freeze Russian-Turkish economic relations across the entire spectrum, from tourism to nuclear power. Loss for the Turkish economy guaranteed: time to find a replacement for the millions of tourists and tens of millions of consumers fruit it is impossible. But any ban is a double-edged sword, problems are inevitable and in Russia. Will suffer not only the travel companies and airlines (if those industries still capable of experiencing suffering), but also importers of agricultural products. Under the question of such gigantic projects as the nuclear power plant “Akkuyu”, which has already invested tens of billions of rubles.
In addition, Turkey for Russian companies is the largest market, not just oil and gas, but also metals, coal, wheat and other commodities. If Turkey meet the Russian response your response, victory “on points” could be for Ankara, as Russia’s exports five times more Turkish. However, this deficit Turkey is partially (and maybe completely – unlike trade, there are no accurate statistics) will be compensated by tourism.
In fact, mutual trade with Turkey “rose” on Wednesday: the Russian customs put on a 100 percent inspection of all cargo “from” and “to”. No formal announcement was not, the reasons for the operators, was never explained, but it was clear.
The first public announcements followed in the evening: the head of the Ministry Alexander Tkachev in a television interview explained in detail, from which countries, Russia may import vegetables and citrus fruits (and in fact just a year ago, Turkey was included in the list of the countries whose supplies will cushion the effect of the Russian bradenburg), and some to sell wheat.
On Thursday morning it was announced that the government, “given the repeated violations of Turkish producers in the Russian law”, requested the Rosselkhoznadzor to strengthen the control of supply of agricultural products and food from Turkey, and arrange additional checks at the border and at work sites. The Rosselkhoznadzor has started a “total review” of all agricultural products originating from Turkey.
Sweetcollect Russia with Tortias the materials of the plot
But this was only the prelude. In the afternoon, opening a government meeting, Prime Minister Dmitry Medvedev, pushing into the background the main theme – the Russian Railways investment programme – revealed the Russian response to Turkey in its entirety.
“Yesterday we discussed this issue with President in Yekaterinburg. As a result the government was instructed to develop a system response to an act of aggression in economic and humanitarian spheres. Decisions will be made on the basis of the law “On special economic measures” of December 30, 2006. This law, in fact, in such a situation and calculated and relates to ensuring our safety. There is such a set of measures: the suspension of the implementation of economic cooperation programmes, and restrictions on financial transactions and restrictions on foreign trade transactions and changes in import and export customs duties, measures on the tourism sector, for transportation, including transit, the movement of air and water vessels, for humanitarian contacts, and, finally, on the use of labor power”, – said Medvedev.
A great cold
Under the act on special measures are subject to both the Russian mega-project in Turkey – the gas pipeline “Turkish stream” and NPP “Akkuyu” admitted in an interview with reporters, Alexei Ulyukayev, however, leaving the cautious wording little chance of survival.
“This project (“Turkish”) is no different from any other project, so we are talking about investment cooperation. This is one of the largest alleged investment projects. It just falls under the law on special economic measures, like any other project. (…) The same again (to the question about nuclear power). In a short time the office will prepare relevant proposals. In General, this investment project is subject to the law on special economic measures, and may be the subject of a decision of the decree and orders of the government. But a concrete proposal will prepare the appropriate Department,” he said.
If the gas supplies to the country, relations with which has categorically wrong, though, and are a source of constant headache, but still possible, the construction of a nuclear power station in the state, publicly accused of aiding terrorists, it is already struggling. Therefore, prior to the first official statements following the fall of the Russian plane was clear – the project of “Akkuyu”, “showcase” almost model until recently, bilateral relations were at risk. And before the crash of the su-24, the project was mentioned in a negative context: Turkey’s President Recep Erdogan in October reminded Russia about the construction of nuclear power plants and urged “to act carefully” in the Syrian issue.
“They have already invested $3 billion in this project”, – said the Turkish President. “If the Russians don’t build a nuclear power plant “Akkuyu” will come along and build other” – philosophically remarked Erdogan. Actually such examples in the history of Russia built the Iranian nuclear plant “Busher” for the Germans, however, several decades later.
In “Rosatom” from commenting on possible freezing of the project so far refrained.
Only this year “Rosatom” has received 50 billion rubles of state subsidies for construction of “Akkuyu”. In 2014, the subsidy amounted to 22.5 billion rubles. In General, the cost of building the station is estimated to be worth about $22 billion.
NPP “Akkuyu” in Turkey is based on the BOO scheme (build-own-operate, “build-own-operate”) when the owner of a foreign nuclear power plant by the Russian side. The company “Rosatom” now own controlling shares in the capital of the project company JSC “Akkuyu Nuclear”, that implements the project. To date the Turkish authorities have already received approval of the report on the impact on the environment, until the end of 2015 was expected to obtain a license to generate, on – licences for the construction, after which it would be possible to start the construction.
Fotogalereja Moscow pelted stones at the Embassy Tortoise photo
Turkey in Russia, too, has its megaprojects. Thus, Turkish “Renaissance construction” and “Yamata Industrial Projeler” last year concluded contracts in the framework of the project “SIBUR” “ZapSib-2” value $1 billion and $0.5 billion respectively. The target deadline is the end of 2019. In SIBUR declined to comment.
The same “Renaissance construction” less than a year ago agreed with the RDIF on a joint investment in construction of shopping centers, medical facilities, transport infrastructure and commercial real estate. The parties are willing to jointly invest about $400-500 million, but still to specific projects is not reached, and now just will not come soon.
The oil for the tomatoes
According to the Eurasian economic Commission, the Russian imports from Turkey during January-September 2015 was $3.06 bn, exports from Russia to Turkey is $15 billion.
The largest article of the Turkish exports of tomatoes ($281,3 million for 9 months), automotive components ($136,1 million), citrus ($134,9 million), apricots, cherries, sweet cherries, peaches, plums ($94,4 million), women textile clothes ($74,9 million), grapes ($69.2 million), cars ($53,4 million), knitwear ($50.4 million), leather footwear ($42,8 million).
In real terms Russia imports from Turkey more than 360 thousand tons of tomatoes, 250 thousand tons of citrus, more than 100 thousand tons of grapes, about 80 thousand tons of apricots, peaches and plums, 40 thousand tons of onions and garlic, 17 thousand tons of cucumbers, and apples, pears, quince, cabbage, dates, figs, avocado, pepper, rice, ginger, starch, seasonings and other vegetable products.
The basis of supply of livestock production is poultry meat (20.7 thousand tons for 9 months of this year compared to 9.4 thousand tons in the corresponding period last year), fresh fish (6,1 thousand tons compared to 9.4 thousand tonnes) frozen fish (1.4 thousand tonnes 1.3 thousand tonnes).
In Russian exports of $2.8 billion are oil and oil products, $1.77 billion – ferrous scrap, semi-products and products of non-alloy steel, $835 million of copper and aluminum, $543 million for coal, $362 million of wheat, $324 million – sunflower oil, us $163 million – fertilizer, $101 million – iron ore. Value data on exports of gas are not disclosed.
The group of MMK Victor Rashnikov may be stronger than the other metallurgical companies in Russia to be affected by the restrictive measures against Turkey on the background of the incident with su-24 bomber, shot down air force the Turkish side, came to the conclusion a number of experts.
Turkey is one of the largest steel markets in the region, say analysts at Barclays. In January-October, more than 6% of all steel produced in Russia, was sent to Turkey, the largest exporter is CMI. At “Magnitogorsk” Turkey accounts for 9% of sales. With main export product – hot rolled coil – domestic market because of its limited capacity to implement fully will not work, warns Barclays. However, the risk for MMK can be partially offset by the fact that the group in Turkey, have own factory, MMK Metalurji, the capacity is 2.3 million tons.
Metalloinvest also supplies products to Turkey, calling it traditionally the main consumer country in the middle East.
Russian retailers claim that they will be able to replace the supply of Turkish food in case of a ban. Difficulties may arise in the categories of fish, fruit and vegetables, where the share of sales of Turkish goods are the most significant.
The share of Turkish products varies depending on the category. For example, in the segment of chilled fish 90% of sea bass and bream is sold in Turkey, said the Director of external communications of Auchan in Russia Maria Kurnosova. In the segment of fruit and vegetables the most significant share of shipments of Turkish lemons is 90%.
“Auchan” can replace the supply of fruit and vegetables from Turkey products from Morocco, Israel and China, however, does not preclude difficulties with efficiency in the restructuring of logistics.
In grocery hypermarkets “Auchan” is represented apricots, figs, halvah, gummies, and a few articles of biscuits from Turkey. The share of these products is negligible, and the entire range, except the figs, the retailer will be able to safely replace products suppliers from Uzbekistan, Tajikistan and China.
Direct Turkish import of goods of own trade mark of a network no, but suppliers in Turkey buy nuts and dried fruit.
“Today marks a sharp decline in sentences in Turkish products,” said Maria Kurnosova. According to her, currently Auchan is considering the possibility of replacing Turkish suppliers, but before the official announcement of the sanctions no action will not.
For “Azbuka Vkusa” Turkish food ban will not be critical, said the representative Andrei Golubkov. From 18 thousand of SKUs in the network for Turkish products accounts for only about 30 in the categories of fruits and vegetables, coffee, fish, Turkish sweets. “We can easily find alternative food embargo on products from the EU was critical of” – he said. It’s harder to find a replacement for Turkish fish (sea bass, sea bream), as for European suppliers from the Mediterranean, the Russian market is already closed. The company in the case of banning Turkish imports will be looking for new suppliers in Morocco, Tunisia, UAE, Sri Lanka, and does not exclude that changes in logistics will affect the cost and final price of the goods. In addition, I believe in the company, prohibition of imports from Turkey can put pressure on prices in the whole market.
In network Metro Cash & Carry in Russia, the share of Turkish products in the category of fruit and vegetables is about 25%. Metro will be able to quickly adapt its range in the case of the introduction of the ban on supplies from Turkey, and about any deficiency in the market to speak too early, says the CEO of the company in Russia Boris Meniali.
In the shops of “Dixy” the share of Turkish products in the most significant categories of vegetables and fruits, and during the peak season the proportion of Turkish citrus may exceed 50%, said Director of external relations of the group Dixy Catherine Kamanina. “We are closely monitoring the situation and stands ready to flexibly adapt to changing conditions. If necessary, the network will make every effort for prompt replacement providers to the usual and popular for buyers in this period of the year the assortment has been presented on the shelves,” said she.
Fotogalereja Russian su-24 in Siriuse photo
The head of the Ministry Alexander Tkachev, meanwhile, warned retailers against price increases “sauce” Turkish problem, and promised that next week will be ready the management options for the trade flows. Country-suppliers of fruits and vegetables “stand in line” to take the place of Turkey, the Minister said. However, such “turn” the authorities seen last summer, when he introduced predamage, but to prevent the acceleration of food inflation high interest alternative suppliers to the Russian market did not help.
Agriculture Minister also expressed confidence that if Turkey will cease to buy Russian wheat, the markets will be found – for example, in China. Potential participants IPO “Novorossiysky Combinat KHLEBOPRODUKTOV”, the main terminal for handling grain in Turkey, Chinese alternative, however, is unlikely to soothe.
The industry is prepared in advance
Great article in Russian imports from Turkey – parts for assembled in Russia vehicles (and vehicles too). The problem is smoothed by the market situation: against the background of dramatic decline in the demand power and so underutilized, and in December-January, many producers are relieved to send workers in “traditional corporate holiday”.
The representative of the Russian division of Ford announced that the situation with 100% screening of cargo from Turkey for Russian companies the company was affected, but “at the time of delivery and on production is not affected”. However, of the three Ford plants in the territory of the Russian Federation currently employs only one.
“At the moment there are no delays, but not enough time has passed. We are monitoring the situation. Direct effect on production at the moment, it has no”, – said the representative of Volkswagen, adding that the company assess the situation. Thus, according to him, the VW cars from Turkey to Russia are not delivered.
Renault did not comment on the situation with deliveries of automotive components from Turkey. The representative of AVTOVAZ refused to comment on the issue, saying only that the company is “monitoring the situation”. At Nissan found it difficult to estimate possible adverse effect, the company representative explained that the percentage imported from Turkey components is very small.
According to the representative of Sollers, the situation in the company “basically no impact”. “In Turkey we are buying a small item for the production of UAZ. These items are always purchased for several months, so currently, the stock has until Feb. If necessary during this time we will be able to find alternative suppliers, including Russian ones,” he said.
In Toyota did not comment on the situation, also noting that watching the development of events. The company is supplying from Turkey a number of automotive components and Toyota Corolla.