As the European Union’s second biggest apple producer, Poland has some 700,000 tonnes of the fruit it usually sells to Russia but can’t, because Moscow has a food embargo on many EU and US goods as part of tit-for-tat sanctions related to the Ukraine crisis.
Many of those Polish apples will inevitably head for western Europe, potentially displacing their more expensive European rivals. Others will go to markets in Asia and the Middle East, traditionally supplied by EU countries such as France.
Apples are just one element in an unfolding problem for Europe’s farmers and its central bank policymakers. From Polish apples to French pork and Greek peaches, exporters to Russia may either have to slash prices or destroy produce.
It is just about the last thing that the European Central Bank wants to see as it struggles with a flatlining economy and worries about deflation.
George Polychronakis of Greek fruit export association Incofruit-Hellas, for example, watched as some 250 truckloads of peaches and nectarines en route to Russia were halted when the embargo hit.
Greece exported 160,000 tonnes of fruit to Russia last year, worth 180 million euros ($240 million) to the crisis-hit EU member.
“They’ll either have to sell it at any price to countries along the way or be forced to bring it back to Greece where it will be destroyed,” he said.
“Oversupply will drag down prices for other goods and that will have a domino effect on the entire market.
It is also not just fruit. “In total, a million tonnes of pork, poultry and beef from the EU will remain on the market (rather than go to Russia). It’s a very big blow,” said Paul Rouche, general manager in charge of pork for the French meat trade union SNIV.
