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Tomato ban reveals lingering problems between Russia, Turkey

Russia is continuing its tomato ban, but its problems with Turkey are rooted elsewhere.
A card showing the price of tomatoes is seen at a bazaar in Istanbul, Turkey January 30, 2016. Inflation has become Turkey's biggest economic challenge, hitting the pockets of ordinary people even as President Tayyip Erdogan and the ruling party have built their reputation largely on economic growth and stability. Picture taken January 30, 2016. REUTERS/Murad Sezer  - RTX25JC4

Ankara and Moscow have made impressive progress recently on some tricky diplomatic issues. Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan met May 3 in the Russian resort of Sochi to discuss energy, weapons, tariffs, sanctions and the complexities of the Syrian civil war — even agreeing to set up de-escalation zones there.

But they can't seem to find their way past the "tomato crisis." Clearly, the symbolic tomato — while important — isn't really the problem.

The countries' relations have been strained since Turkey shot down a Russian millitary jet in November 2015. Sanctions ensued, on both sides. Most recently, Turkey’s Ministry of Agriculture in March imposed a 130% tariff on Russian wheat and other grains, and sanctions on rice, peas and sunflower oil from Russia. In 2016, Turkey bought $720 million worth of sunflower oil, $76 million of corn and $490 million of wheat from Russia. 

It's interesting that Russian Agriculture Minister Alexander Tkachev reacted to the Turkish sanctions using the same language Putin used to describe the jet incident — the event that marked the start of the trade war: that Turkey had stabbed Russia in the back. The agriculture minister claimed Russian farmers would lose $1.3 billion to $1.5 billion annually. After the Sochi meeting, Turkey agreed to lift the sanctions. 

As for the economic impact on Turkey, of the country's overall $1.9 billion worth of fruit and vegetable exports in 2015, $875 million worth was sold to Russia. That figure plummeted to $331 million after the Russian bans, the Daily Sabah reported. Russia now has lifted or agreed to lift sanctions on oranges, tangerines, strawberries, pears, cucumbers, apricots, apples, peaches, plums, grapes, onions, broccoli and carnations.

But not tomatoes. 

Russian Deputy Prime Minister Arkady Dvorkovich said after the Sochi summit that even though Turkey would abolish the wheat embargo, Russia would continue restrictions on tomatoes, possibly for another three to five years.

Tomatoes are big business in Turkey. Ali Kavak, chairman of the Mediterranean Fresh Fruit and Vegetable Exporters Union, told Turkey’s pro-government Yeni Safak daily May 4 that before the crisis, Russia imported 380,000 tons of the total 540,000 tons of tomatoes exported annually by union members. Now other neighboring countries are taking Russia’s place. Curiously, Belarus, Kazakhstan and Azerbaijan import tomatoes from Turkey and sell tomatoes to Russia. Russians also have invested in greenhouses to grow their own tomatoes.

The Daily Sabah reports Turkey sold $259 million worth of tomatoes to Russia in 2015, but only $87,000 in 2016.

So what did Turkey gain at the Sochi summit? Turkish Economy Minister Nihat Zeybekci told NTV that Russia had lifted the restrictions on work permits in contracting, tourism and timber sectors and hiring of Turkish workers. But another major issue still hiding among the tomatoes is non-resumption of visa-free travel between the two countries. So far, only businesspeople can travel without visas.

After the meeting, Putin said relations were totally restored, but Erdogan mentioned that their agreement did not cover tomatoes. Erdogan’s praise of cheaper and tastier Turkish tomatoes did not impress the Russians, but Putin at least kept hope alive, saying, “We can’t forever keep our markets closed to Turkish tomatoes.” Growing tomatoes in Russian greenhouses is much more costly than buying them from Turkey.

So why does this particular embargo continue? 

It's not only about the tomatoes as a particular produce. Many issues need solutions, and these are all grouped under the label of “tomato crisis.” For example, Tkachev recently said, “For Turkish tomatoes to be allowed into Russia, we have to discuss our meat exports to the Turkish market.”

Reciprocal sanctions by the two countries have severely affected their trade volume, which stood at $31.2 billion in 2014, $24 billion in 2015 and only $16.8 billion in 2016. This year, trade volume for the first quarter was $4.88 billion. Of that figure, only $498 million worth was Turkish exports to Russia. The trade volume target was once $100 billion.

In other words, Turkey suffered more from the sanctions. Even lifting the tomato ban is not likely to restore equilibrium. But opening the way for this symbolic produce would also mean most problems between two countries are solved.

Meanwhile, tomatoes continue to be a news item because of their high prices in Turkey. In April, a 61% price surge in tomatoes led the Turkish market in price hikes.

If Russians are not buying them, why did tomato prices skyrocket in the domestic market?

Earlier this year, when demand was low because of Russia's ban, much of Turkey's tomato crop rotted. Now there's a shortage, and Turkey's tomato exports have grown 40%, according to Bulent Tufenkci, minister of customs and trade.

Citizens today pay $2-$4 (7-15 Turkish liras) per kilo (2.2 pounds) of tomatoes, which last year cost about a dollar. Yet they wink and smile, saying, “We are glad Russia is applying the embargo. Imagine how much we will be asked to pay for tomatoes here if we also sell to Russia.”

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