Some state crops may feel squeeze from Ukraine war
As Russia’s invasion of Ukraine drives up prices of grains, sunflower oil and other commodities, several California crops may begin to feel ripple effects from the war, underscoring their link to global markets.
Todd Sanders, executive director of the California Apple Commission, said he expects more market competition for California and other U.S. apple producers this year.
That’s because Poland, which historically shipped a significant amount of its crop to Russia, will be looking for alternative markets due to new sanctions against Russia. He said he thinks more Polish apples will show up in markets that currently buy California apples, putting more pressure on those markets.
“Now our apples are going to have to find other homes,” Sanders said. “We’ll be displacing somebody else or vice versa. It’s just this huge snowball effect.”
Poland remains the largest apple producer in the European Union and the world’s No. 3 producer, after China and the United States. Other significant players include Turkey and India, according to the Food and Agriculture Organization of the United Nations.
Though Polish apples do not currently have market access to the United States, because a formal pest-risk assessment has never been conducted, Poland has been included in the EU’s request for expanded market access to the United States, according to the U.S. Apple Association.
“Something that I’m hearing is that (Poland is) going to begin pursuing market access to the United States fairly aggressively,” said Elizabeth Carranza, the apple commission’s director of trade and technical affairs. “That might be something that we could see coming into effect here in the next couple of years.”
She said there could also be more market pressure from other EU countries such as France, another major apple producer that may need to look for additional markets.
More immediately, California producers of wild rice have already lost a key export market: Russia. Carranza, who also oversees trade for the California Wild Rice Advisory Board, said a recent cargo ship headed to Russia with California wild rice was rejected at the port and had to return.
It is technically still legal to ship wild rice to Russia because the commodity is not included in the U.S. embargo list, she said. But the problem is logistics, as exporters are having trouble finding ocean carriers willing to go there. Major shipping lines have said they have suspended service to and from Russia.
“At this point, we pretty much lost that market for our wild rice,” Carranza said.
Up until the war started, the advisory board had been “actively conducting promotions” of California wild rice in Russia with a “pretty full-blown and robust” program, she said. The advisory board had hired an in-country representative, built a website and promoted the product on social media in Russian. Now, with U.S. sanctions and banks not allowing wire transfers to Russia, paying trade reps for their services has been a problem, she said.
Most California wild rice is marketed domestically. With the loss of Russia, the advisory board has shifted its focus and trade-promotion funds to other markets, Carranza said.
For now, shippers may need to send more volume to the United Kingdom, which remains the top export destination for California wild rice. They used to ship more product to Turkey, Carranza said, but tariffs have made that market less attractive. Canada may be another outlet, and later China, to which the board is working to gain market access.