bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Wednesday 17.01.2018 | Name days: Tenis, Dravis
LatviaLatvia

Economic Diary of Latvia. Rivers of milk and colourful river banks

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThis week went by under context of Russian sanctions on certain sectors of Latvia’s national economy. Losses were counted and solutions were sought by dairy farmers, fish processing entrepreneurs and florists.

Representatives of Latvian dairy industry tried calculating losses caused by the ban to sell their products in Russia. The tried calculating the amount to request as compensation from Brussels. They failed, because calculations of farmers and Agriculture Ministry differ from one another.

Dairy farmers claim that in order to calculate losses it is necessary to consider too many aspects – volume of milk, number of cows, feed expenses and others. The main object of discussion is the average self-price of milk. The problem is that this index fluctuates in different farms from 24 to 30 euro cents per 1 kg of milk. The price depends on the size of the farm and labour efficiency. According to calculations from Agriculture Ministry, the average index is 27 euro cents. Because calculations of the two sides differ, they cannot come to a consensus. Therefore, it is not possible to ask for assistance from the EU.

Lithuanian farmers, on the other hand, have successfully calculated their losses and have requested a specific amount from Brussels – approximately EUR 11 million. Estonians have done their homework as well.

Last autumn, when milk procurement prices suffered a decline, losses of Latvian dairy industry were estimated at EUR 9 million per month. Last year, European Commission announced that it would review the matter of financial assistance if the situation in the industry does not improve.

Latvian Agriculture Minister Janis Duklavs hopes farmers will not start liquidating their farms and putting down their livestock. With that, however, he admits that the consequences of the crisis are becoming apparent, and some of the farmers will have to put down their livestock, because finding new markets to sell products is hard.

It was recently announced that Latvian Food Union has decided to reduce milk procurement prices by 1.5 euro cents per 1 kg – down to 20.5 euro cents. Farmers predict that this price decline will continue, as other milk processing companies could follow the example set by Food Union.

Because of the crisis, Latvijas piens was forced to request a grace period in order to put off the repayment of the loan that was provided with a state guarantee. It has become known that two largest Scandinavian cooperatives – Arla Foods and Valio – are interested in buying the Latvian milk processing company. Duklavs has confirmed there are three companies interested in procuring shares in the Latvian company.

Fish starts rotting from its head

Latvian fish processing companies have been struck as well. Russian Rospotrebnadzor has imposed an embargo on canned fish products of multiple Latvian companies because of problems with labels. From 1 August onward, canned fish products of Latvian companies Ventspils zivju konservu kombināts, GAMMA-A, Sabiedrība IMS, UNDA and Saldus gaļas kombināts are prohibited to be imported to Russia, as mentioned in an announcement published on the website of Rospotrebnadzor. It is worth mentioning that four of those production plants are the main supplier to Russia’s largest cities.

One of the recently surfaced versions for this decision has nothing to do with politics and is purely economic. According to this version, Rospotrebnadzor’s recent embargo on Latvian canned fish products can be linked to a powerful lobby of fish processing companies from Kaliningrad. They do their best to push their products to Russia using state institutions.

As part of a federal support plan for the development of fishing in Svetly village of Kaliningrad Oblast, a massive fish processing complex was established there last year. There are 80 companies in Kaliningrad that are engaged in fish processing. Founder and Director General of Zapadnaya Ribnaya Kompaniya Nikolai Nechai had previously said that 50% of fish caught in 2014 was used to produce livestock feed. According to him, his company could not compete with Latvian companies capable of dumping, because the EU compensated 50% of costs and provided 70% grants for opening new production lines.

Furthermore, Kaliningrad fishermen and fish processing companies asked the federal government to impose a ban on supplies of products from Latvia and Estonia in June 2015.

And what a coincidence it must have been for a different Russia food supervisory institution – Rospotrebnadzor – to impose a ban on imports of Latvian and Estonian canned fish products at the beginning of June. It was allegedly done due to a high concentration of substances dangerous to human health.

What did tulips do to deserve this?

Latvian florists have ended up the sights of Russian sanctions as well. Rosselhoznadzor has announced that it could decide to ban imports of flowers and plant products. This embargo, if applied, can potentially affect Netherlands, Poland, Lithuania, Slovakia, Czech Republic, Italy and Germany. The reason for the embargo is allegedly because phytosanitary services of these countries certify flowers grown in the Netherlands without providing safety of their transport to Russia. The discovery of California Western flower thrips, chrysanthemum white rust and Silverleaf whiteflies in flowers grown in the Netherlands were the main violations mentioned by Russian authorities.

Eurostat data shows that Latvia exported flowers worth a total of EUR 34.5 million to Russia in 2014. According to information for Latvian Agriculture Ministry, the total value of flowers of Latvian origin was EUR 14 million. This means that approximately two-thirds of flowers and plant products sent to Russia consist of re-exports. With that, it can be estimated that Latvia was used as a corridor to carry Dutch tulips worth EUR 20 million to Russia in 2014.

Ref: 017.109.109.3632


Leave a reply

Betsafe: To Latvia from the Heart has laughable chance of entering next Saeima

With declining ratings, Inguna Sudraba’s party To Latvia from The Heart has been left with laughable chances of entering the next Saeima, Betsafe bookmakers say.

EU Affairs Committee: EU Digital Single Market motivated Latvia to perform reforms

European Union’s Digital Single Market strategy offered new opportunities for Latvian businessmen to actively present their services in other member states. The strategy also served as an impulse for the business environment and state administration. The strategy motivates our government to walk the road of reformation more actively and clean up messes that have remained for a long time, said chairperson of Saeima’s European Affairs Committee Lolita Čigāne on Wednesday, 17 January.

Expert: Zhdanok’s decision to leave EP was carefully calculated to revive Latvian Russians Union

The decision made by member of the European Parliament (EP) and leader of Latvian Russians Union (LRU) Tatyana Zhdanok, in accordance with which she intends to leave the European Parliament to instead focus on LRU’s election campaign, was a carefully calculated step to reanimate the party, said dean of Social Sciences Faculty of the University of Latvia Juris Rozenvalds.

Maxima Latvia expects price decline up to 15% in 2018

Following Maxima Latvija’s decision to reduce prices for nearly 1,000 important goods, it is expected that a similar step will be made by other players in the industry. This could mean prices for everyday goods could decline by up to 15%, as BNN was informed by the company.

Latvia’s economy reaches highest peak since 2015

Residents’ mood has improved for most positions of the study. Residents were positive the most about ongoing changes for Latvia’s economy, the value of which has reached its peak since July 2015. In spite of optimistic changes, however, 30% of respondents are critical about ongoing economic changes in Latvia, according to results of the latest Baltic International Bank’s Latvian Barometer.

Riga exchange hopes for new securities issuers this year

There are hopes to see new Latvian businesses release shares on the stock market this year, says chairperson of Nasdaq Riga Daiga Auziņa-Melalksne.

Latvian universities to offer students an innovative grant system

To help develop students’ innovative and business abilities, Latvian Education and Science Ministry has developed a new student grant system, which will focus mainly on supporting innovative projects and research and further improve cooperation between universities and leading businesses to attract human resources, the ministry reports.

Russian sociologists fear closure, quit publishing election polls

Russian leading independent polling organisation Levada Center has stated it has quit releasing results of polls on the country’s spring presidential election citing concern that the authorities could close it down for what they see as meddling in politics.

Court maintains pledge on former LAR leader’s bank accounts and owned property

Court has applied pledge status on property and bank accounts owned by Riga City Council member Mārtiņš Bondars to enforce EUR 15 million from him as part of Latvijas Krajbanka criminal case, as reported by TV3 News.

McDonald’s to use unrecycled packaging for 7 more years

World’s largest catering chain McDonalds has set the aim of ensuring that by 2025 all its packaging would be from either from recycled or renewable materials, which would be an increase current proportion of a half.

Saeima speaker: Judicial Affairs Council’s work should be more apparent

Work performed by the Judicial Affairs Council should be made more apparent, said Saeima speaker Ināra Mūrniece during her meeting with Supreme Court chairman Ivars Bičkovičs.

Mass protests in Greece do not hold back new bailout reforms

The parliament of Greece has adopted a large set of reforms pushed for by international creditors in return for more bailout money, despite approximately 20 000 people protesting outside the parliament and brief clashes with riot police breaking out.

Foster families in Latvia to receive larger benefits

Municipal administrations have a duty to pay larger benefits for child care when children are put in foster families, Latvian Welfare Ministry reports.

Government plans to improve anti-doping measures in Latvia

During a meeting of the Cabinet of Ministers, a legislative draft developed by Healthcare Ministry on adding changes to the Sports Law for the improvement the country’s anti-doping measures was approved.

Only 12% of workers know their organization’s IT security policy

Businesses around the world still suffer from a catastrophically low level of awareness for IT matters, according to a study performed by Kaspersky Lab and B2B International.

Parents let children on ice in spite of temporary restriction

On Sunday, 14 January, officers of Riga Municipal Police observed with video-recording equipment how two people were skating on the surface of Victory Park’s pond. Because it is banned for people to remain on ice of large bodies of water in Riga, officers were sent in.

Czech President to be determined in duel between Zeman and Drahoš

In the Czech presidential election, no candidate has garnered a half of the votes and its result will be determined in a run-off between the current eursceptic President and a pro-European academic.

Aldaris: non-alcoholic beer market in Latvia grew 9% in 2017

Aldaris concluded 2017 with a significant increase in their non-alcoholic beer category of products. Demand for non-alcoholic beer has increased across all of Latvia – market growth was 9% in 2017, as reported by the company’s representatives.

Politician reports meddling with e-health system; prime minister parries

Last Thursday, 11 January, e-health system ‘suffered malfunctions’, which suggests that it may have been hacked, Saeima’s Social and Employment Matters Committee head Aija Barča mentioned in an interview to Latvijas Radio.

Pension fund cautious about 500-million-euro bridge project to Saaremaa

Commenting on the idea that Estonian pension funds could invest into the ambitious project of building a bridge from mainland Estonia to the country’s largest island, Swedish Swedbank has expressed caution.

Study: more than half of Latvians do not trust other people

52% of Latvian residents believe most people cannot be trusted. Only 5% of residents are ready to trust their fellow man. Less than one-fifth of Latvian residents trust decision-makers, according to results of a study performed by SKDS.

Economic expert: 2018 expected to be good for investors

«This year promises to be good for investors, because global economy is on a rise and profits of businesses have a tendency to grow,» says Luminor economic expert Gints Belēvičs.

Estonia counts more residents for 3rd consecutive year

Registering an increase in the Estonian population for the third consecutive year, Estonian statisticians have estimated that the population has increased by 3,070 people to 1,318,700 residents. They have also warned that this is preliminary data, which could still change considerably as unregistered immigration has not been included.

Russian school struck by teenager knife attack

In a knife attack on a school in Perm, Russia, eleven children and a teacher have suffered injuries.

NA: city council has to consider new partnership approach for Agenskalns market

Riga City Council members have to decide what is more important for Agenskalns market’s development: rate or quality. There are two options: force a closed market development with an auction of long-term lease or consider public private partnership option. Such a proposal was submitted to Riga City Council’s City Property Committee by the faction of the National Alliance.

Newest comments

Would you be ready to boycott something in your life?

View Results

Loading ... Loading ...

Polls Archive



Category feed: Feed: