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Russian flower growers requested an anti-dumping investigation

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Moscow, February 22 – Delivery of cheap flowers from Kenya and Ecuador infringes on the interests of Russian producers, and local flower growers are required to launch an anti-dumping investigation, which could lead to an increase in import duties, Alexei Antipov, head of the National Association of Flower Growers, told the News Agency.
Now, domestic flowers still occupy only 17% of the market, he says, and the main suppliers of flower products to the Russian Federation are Kenya and Ecuador. “Russian flower growers can and really want to substitute at least part of the import volume. The low import duty rate, which has fallen from 15% to 5% since Russia joined the WTO, plus “gray” customs clearance schemes, hinders this. These factors combined, the Kenyan and Ecuadorian flower “crush” local production and do not allow it to develop, “believes the head of the association.
The decision to initiate the investigation was proposed by the Assembly within the framework of the meeting of the Subcommittee on Tariff and Non-tariff Regulation and Protection Measures in Foreign Trade of the State Commission for Economic Development and Integration. “The corresponding recommendation is based on the obligations of the Russian Federation within the framework of the Customs Union, according to which the import duty rate cannot be increased for a specific product. At the same time, given the economic damage to the industry due to cheap imports from third countries, there is the possibility of introducing protection against dumping, ”- explains Antipov.

Industry damage

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To start an investigation within the framework of the Eurasian Economic Union, it is necessary to prove the existence of damage to the industry – that is, the flower factories that participate in the investigation as an applicant present financial and economic indicators for the past five years. According to the requirements of the application for anti-dumping protection, manufacturers in the EU countries shall formally support the investigation and, if necessary, provide the committee conducting the anti-dumping investigation with their economic indicators.
Cheap flower from Ecuador and Kenya is also a problem for other producers in the Eurasian Union, says Antipov. Currently, the association has a number of agreements with flower growers in Armenia, Belarus and Kazakhstan. “The decision on how much to increase customs duties in the event of success of the investigation remains with the Eurasian Economic Commission. There is an experience of investigations, as a result of which import duties increased by more than 120%,” said the president of the association.
Commenting on the costs of domestic producers, he notes that each plant has its own cost, but in general, the list of factors affecting the pricing of flower products is very large: equipment maintenance, electricity with gas supplies, taxes, agricultural means – for example, biosecurity, pesticides, fertilizers, as well as transportation and packaging etc. But the problem is that the cost price is increasing due to the significant increase in the value of these costs – in contrast to manufacturers from African countries.
“Now everything is getting more expensive, and the cost is going up. Fertilizers have doubled in price, tariffs for the services of natural monopolies have gone up, wage costs have increased. For Kenyan and Ecuadorian importers, the costs included are much lower: in both countries labor is cheap, consumption Gas and electricity are low due to climatic characteristics, ”Antipov explained.

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