Dear Madams and Sirs,
Information agency Credinform congratulates fair ladies with the spring holiday – the 8th of March! This day is strongly associated with traditional symbol of beauty and renewal – a bunch of fresh flowers.
It is not a secret that flowers in the Russian stores are mainly imported from abroad. Lack of agro-climatic resources and greenhouse facilities are the reasons of non-possibility to satisfy the whole demand during the year. Deficit of domestic plants is especially noticeable in winter and early spring, when there is a peak demand for flowers due to the International Women's Day.
Devaluation of the ruble against main foreign currencies has made significant adjustments in the flowers market both in monetary and volume terms (see picture 1). Following the results of 2015, 72,3 th tons of flowers were imported, that is by 8,4% less than in 2014 with its 78,9 th tons. Speaking about monetary import volume, the reduction by 19,5% is very much significant (492,7 mln USD in 2015 and 612,7 mln USD in 2014).
Geography of fresh flowers supplies was also changed (see picture 2): the Netherlands being until recently the undisputed leader, gave way to the Latin American Ecuador, which has taken 37% of the market in volume terms in 2015. The relative ease of switching the logistic flows to South America can be explained by the fact, that Ecuador is our country’s long-standing banana supplier. Moreover, good relations between the two countries promoted to abolition of additional administrative and customs barriers for trade.
As a reference: flower products are procured in 69 countries, including the exotic Tanzania, Ghana, Surinam, Malawi, Mali etc.
46,7% of the market belong to roses, the most popular flower in Russia. Then follow golden daisies with 22%, pinks with 8,7% and lilies with 2,1%. The lowest demand is for orchids and gladioluses – 06,% and 0,1% respectively (see picture 3).
Following the statistical data, the highest prices on flowers fall to the end of February – early March. That is absolutely predictable seasonal event due to the highest demand. However, inflation pressure observed in 2015 will probably remain in 2016, because of the ruble devaluation and import prices rise as a result (see picture 4).
Today one fresh cut flower in Saint-Petersburg costs 100 RUB in average, and 78 RUB in Moscow. The rise in price for a year amounted by 15-30%.
Import reduction and rise in prices give a great opportunity to domestic agricultural companies and farming enterprises to occupy the vacant niche and increase the scale of flowers cultivation in a sheltered ground (greenhouses) within the country.
Despite all the difficulties, there is no doubt that the coming holiday will be filled with the fragrance of flowers, warm words and special atmosphere.
In conclusion of our Newsletter, the Information agency Credinform again congratulates beautiful women with a holiday of the 8th March and wishes you all health, happiness and spring mood!
Beneficiaries of Foreign Non-legal Entities have to be disclosed in accordance with a new law which came into effect as of January 2016: Federal Law of the Russian Federation of 30 December 2015 No.424-FZ “On Amendments to the Federal Law “On Counteraction of Legitimization (Laundering) of Proceeds of Crime and Financing of Terrorism”.
The law introduces amendments and additions to several articles (2 and 3) devoted to the scope and basic definitions; the article 7 devoted to duties of organizations engaged in transactions with funds or other property (credit organizations, insurers, leasing companies, pawn offices etc.) was also added.
The improvements are mainly related to the regulation of foreign non-legal entities (funds, partnerships, trust management and other similar entities of collective investments which are not legal entities according to international law) active in the territory of Russia.
A foreign non-legal entity doing or contemplating business in Russia has to disclose the following data: name, registration/tax numbers, location of its primary activity. For trusts and similar foreign entities the following data has also to be disclosed: owned property/property under management, surname, name (and patronymic if available), residential address or location of founders, trustee or trust administrator.
There is a ban for Russian credit organizations to open and maintain accounts or deposits for anonymous owners of foreign non-legal entities. Credit and other organizations engaged in transactions with funds or property will now have the right to refuse their services to these non-legal entities in the event of suspicious transactions aimed at legalization of criminal proceeds or terrorism financing.
Russian banks are now obliged to record data on all cases of refusal to enter into a contract or dissolution of contracts with such high-risk foreign clients and submit these data to the Federal Financial Monitoring Service (Rosfinmonitoring) of Russia. Rosfinmonitoring in its turn will forward this information to the regulator – Bank of Russia – which will inform other banks and financial market players.