Bitter harvest for Moldovan orchards because of the war in Ukraine

Posted 05 April, 2022

In a warehouse in northern Moldova, crates filled with red apples pile up to the ceiling, but for the owner of the premises, this abundance is nothing to cheer about.

Since the invasion of neighboring Ukraine by Russia on February 24, many farmers no longer know where to sell their goods traditionally destined for Russia.

"I don't know how we're going to deal with the remaining apples, there are too many to sell on the Moldovan market," sighs Valeriu Matcovschi, in his sixties, owner of a farm in Bilicenii Vechi.

He usually exports his entire harvest to Russia, ie 2,000 tonnes per year, at the rate of five to seven heavy goods vehicles per week.

Today he must look for news outlets to survive.

At the end of March, he finally sent the first container to Kuwait, but he had to reduce prices by a third and the customer is much more careful about the varieties.

The apple grower has also won contracts with Saudi Arabia and Qatar.

He hopes "not to have to deliver the apples to processors. It would be a tragedy," he says, citing the resulting financial losses.

EU to the rescue

Former Soviet republic of 2.6 million inhabitants nestled between Romania and Ukraine, Moldova "is in a difficult situation", worries the secretary-general of the government, Dumitru Udrea, interviewed by AFP.

The war in Ukraine has led to an influx of refugees with a significant impact on the country's economy, which is also suffering from broken supply chains and soaring gas and electricity bills.

"In 2022, we fear a contraction of the economy of 3% in an optimistic scenario and 15% in the darkest", he explains, while inflation could reach 30% by the end of the year.

Moldova, whose Gross Domestic Product represents less than 0.5% of that of France, was already recovering with difficulty from a series of economic and political crises coupled with a resounding banking scandal involving the disappearance of one billion dollars in 2014-2015.

Responding to Chisinau's call for help, Germany, France, and Romania are organizing a donor conference in Berlin on Tuesday to help it cope with this burden.

"We are going to present projects aimed, among other things, at energy security and the strengthening of purchasing power, hoping to obtain financing of 4 billion euros" in the form of loans and donations, explains Mr. Udrea.

Thanks to a free trade agreement signed with Brussels in 2014 – a move which immediately earned its reprisals from Moscow – Moldova has seen its trade with the European bloc progress, representing more than 60 % of its exchanges in 2021.

And it hopes to deepen its relations with the EU: an application for membership was submitted at the beginning of March.


Close ties with the East

However, it is impossible to replace its traditional partners in the East overnight: Russia, Ukraine, and Belarus.

"At first glance, the share of exports to these three countries - 15% - is not huge, but several sectors are highly dependent on them, including apple growing in the first place", comments economist Adrian Lupusor, of the group of reflection Expert-Grup.

Construction and agriculture are suspended on raw materials supplied by Russia and Ukraine. "Even if importers find suppliers elsewhere, prices will be much higher," he said.

In addition, Moldova, from which more than a million inhabitants have emigrated in the last twenty years in search of employment, could see a drop in remittances from Russia, warns the government official.

This is a crucial lifeline for many families.

Some of the approximately 300,000 Moldovans working on Russian soil could even return to the country, which would put pressure on the labor market and the social security system, adds Mr. Lupusor.

Between the workers sorting the apples and the back and forth of the pallet lifters, Mr. Matcovschi shudders at the thought of perhaps having to part with his fifty employees.

"I don't even dare to think about it, I hope we will resist".

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