ECONOMY

Major headache for exporters

Major headache for exporters

Exporters and other domestic businesses are particularly concerned about the situation in Eastern Europe, with fruit and vegetables being the first victims among Greek exports from the outbreak of war in Ukraine, as their exports to the region have halted since last Thursday.

This concerns quite a substantial amount, as in 2021 exports to Ukraine alone added up to 17.6 million euros and over 32,000 tons, accounting for 2% of all Greek fruit and vegetable exports last year.

The crisis in the region has also led to a dramatic slump in indirect exports to Russia, such as those conducted through Latvia or Lithuania with Belarus as an intermediary station.

According to the INCOFRUIT Hellas association of exporters in the sector, due to the embargo Belarus has imposed on European Union products in response to prior EU sanctions, Greek strawberry exports to Latvia dropped in the period from January 1 to February 25 to just 54 tons, against 1,062 tons a year earlier. Tomato exports have also dropped by some 1,000 tons, from 5,894 last year to 4,880 in 2022.

In total, Greek exports to Ukraine amounted to €193.7 million in 2020, the last year for which there are complete statistics.

As of last Thursday, Greek subsidiaries in Ukraine have also suspended their operations, including Coca-Cola HBC, which has a production plant in the country. Fellow blue-chip company Sarantis has a production unit in Kyiv, belonging to its local subsidiary Ergopack, and has stopped its operation too. Another Athens-listed firm, ELTON, has also shuttered its subsidiary in Ukraine.

There are many indirect consequences, mainly concerning the companies that obtain a large part of their raw materials from Ukraine and Russia. They are flour companies, which receive up to a third of their overall wheat quantities from those countries, animal feed producers, which mainly procure soya and corn, and metallurgy and steel pipe construction industries; that is because Ukraine and Russia constitute major suppliers of steel and iron.

Wood importers are also worried, as many had become reliant on Ukraine for its cheap exports.