The recent devaluation of the Russian rouble against the US dollar is said to be causing major problems for Russian importers currently buying South African citrus in the US currency.
The US dollar is currently pushing above 67 roubles, compared with 12 months ago when it was below 37 roubles.
South African citrus industry body CGA, guided by its representative in Russia, Mikhail Fateef, has reacted by issuing a cautionary note to exporters currently doing business in Russia.
“The extraordinary situation demands for extraordinary measures to be taken to prevent losses to the South African industry,” says Mr Fateef. “We are suggesting therefore that stern advice is given to SA exporters not to ship fruit without 100 per cent payment on the date of loading. In our view, as experts on the spot, such conditions will be understood and positively accepted by prudent Russian importers.”
As Fateef points out, Prime Minister Anatoli Medvedev recently told the Russian public in a television address that the domestic currency’s decline was temporary and that it would return to a stronger position.
“At the same time, forecasts of a further decline of oil prices, the present devaluation of the Chinese currency, economic problems in Far Eastern countries, as well as now bad news from the New York Stock Exchange are all factors which will lead to a strengthening of the dollar and further weakening of the rouble.”
By the end of week 34, the rate of exchange for the rouble against the dollar was 67. “Today, on Monday 24 August, it is already over 71. According to analysts at Sberbank, the US dollar will be running to 90 until the end of the year.”
Fateef said that, so far, the Russian retail sector had made good on its promise to the government that it would to keep prices stable.
“But with the weakening of the rouble’s purchasing power in the international markets, they will not be able to subsidise prices, especially for all of imported commodities,” Fateef observed. “In view of the above situation, South African exporters of fruit, presently citrus, must be aware of risks of defaults by Russian importers.”
