Are Western sanctions causing a fall in Russia's flower imports?

From the onset of what in Russia is called a 'special military operation', flower imports to Russia plummeted significantly. The Central Bank of the Russian Federation forbids Russians from moving foreign currency abroad and enforces a strict limit on the amount of foreign currency they can withdraw. Russian companies that earn revenue in foreign currency must exchange 80 per cent of that foreign currency with the central bank for rubles. These currency controls aim to stabilise the ruble's value, but they also prevent flower importers from paying their foreign suppliers.

Trade hesitancy

Western sanctions banning interaction with Russian banks created trade hesitancy for flower exporters.

In April, many leading Russian flower importers, including Nikita Lapenko, managing director of Moscow's Flower Trade Company, incurred severe delays in flower shipments. He wondered how those who bought flowers on credit would pay their suppliers. Lapenko reminded us that importers bear all costs in foreign currency: they buy flowers in euros at Dutch auctions, paying in US dollars for their delivery to Russia.

According to Artem Timofeev, chief executive of Moscow's oldest flower shop chain Iris, the whole industry continues to see disruptions in the supply chain.

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Photo: FlowersExpo 2020. Credit: AIPH

Source: AIPH