Russian Food Suppliers Have Begun Halting Shipments

Tyler Durden's picture

Until now, when it comes to the fallout in the Russian economy from the crude price plunge leading to a collapse in the Russian currency, most of the interest has been on how the Russian financial system recovers and/or survives and just as importantly, what Putin's response would be. Just yesterday, we wrote that as a result of capital controls fears, many western banks led by Goldman Sachs had halted liquidity to Russian clients and other local entities.

However while the adverse impact on the Russian banking system has been mostly confined to the upper class - since there is virtually no middle class in the country to speak of - the second cold war of words, which rapidly morphed into a very hot financial war, is about to hit the very ordinary Russian on the street, because as Russia's Vedomosti reports, citing vegetable producer Belaya Dacha, juice maker Sady Pridoniya and others, Russian suppliers are suspending food shipments to stores because of unpredictable FX movements. And it is about to get worse: very soon Russians may have to live without imported alcohol because at least on supplier of offshore booze, Simple, halted shipments in "a two-day pause” to see what happens with the ruble, Vedomosti reports.

The full story from Vedomosti:

Food retailers are faced with a halt in the supply of deliveries, according to both suppliers and retailers. The main reason - the jumps in the currency jumps and the devaluation of the ruble, which makes it impossible to plan activities in the current environment.

 

The largest domestic producer of juices "Gardens of the Don" has suspended shipment of products at the old prices to a number of trading companies due to the sharp depreciation of the ruble, the company said. The reason is that the cost of its products is more than 70% denominated in foreign currencies.

Gardens of the Don will ship products "first of all to all network companies who understand the situation and accept the new prices." From 16 to 21 December 2014 the company has suspended shipping to merchants who did not give a definitive answer on the adoption of higher prices, explained the producer of such juices as "Gardens of the Don" "Golden Russia" "My" "Juicy world" and others.

 

Shipments were also stopped by a major distributor and importer of alcohol, Simple, told "Vedomosti" an employee of a major retailer. He was informed yesterday that the Simple warehouse would be closed. A company representative confirmed the suspension: the company took "a two-day pause."

 

"We, as a company that depends on the value of currencies, can do nothing in this situation. We are putting prices in rubles, prices in Uslovniye Yedintsy (UY) or 'conditional units' are not acceptable under the current laws - reported a representative Simple CEO Maxim Kashirin. "Buying the currency now or taking out a bank loan, is impossible: banks will not finance receivables ".

 

According to him, restaurants and retailers will pay with a long delay, the federal network - up to several months.

 

Kashirin says that Simple hopes to resume the next day delivery, but "The decision will largely depend on what will happen on the foreign exchange market." "If everything will fluctuate with the speed with which fluctuates now, we will not be able to give a long delay, great discounts. Most likely, we will be forced to sell, let's say, on a prepaid basis" he fears.

 

Large fish suppliers that operate on imported raw materials, have also begun to suspend deliveries. December 16 during the "Orgy" period in the foreign exchange market, the company suspended shipments to counterparties for one day, told "Vedomosti" employee of a large fishing company. According to him, the company now operates in normal mode, the issue of increasing prices is discussed. However, due to the sharp depreciation of the ruble with all counterparties company now works exclusively on a prepaid basis: "There are no delays."

And so on.

Which is why tomorrow's annual address by Putin to the nation will be, as has been dubbed, his "moment of truth" because while patriotic fervor is still high and the population is willing to suffer runaway inflation for a short period of time, even the greatly suffered Russian population will meet its breaking point. The question is when, and whether that will take place before or after the US shale industry reaches its own breaking point, at which point Saudi Arabia will finally release the price of oil which it has, according to all the "supply-siders", been holding back. Alas, as we and others have demonstrated, that breaking point will most certainly not come for many more months to come. Which means that Putin better find an alternative soon, because if and when the food (and vodka) of Russians' is impaired, then things have a tendency to get very bad.

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RaceToTheBottom's picture

Bitcoin biatches!!!!

johngaltfla's picture

You just know Putin is gonig to retaliate while Obama attends an NBA game over the Christmas holidays to piss that son of a bitch off on live television by making him leave the game early.

Xibalba's picture

WWIII in the making here, and just in time for the holidaze diztractions

suteibu's picture

The country/company that takes a risk to sell Russia liquor or anything else in the face of US actions against Russia will be rewarded down the road by the loyalty of the Russian people.

TheAnalOG's picture

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DoChenRollingBearing's picture

Welcome back.  Sending BTC to Russia might be very lucrative if you can find a good way to do it.  Like w/ Argentina.

Bitcoin glitchez have me disheartened lately though.  Maybe I'll just cash them in for gold.

Note to IRS: At a loss!

TheAnalOG's picture

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MEAN BUSINESS's picture

DCRB, would you be willing to elaborate on "Bitcoin glitchez"? TIA

tarabel's picture

 

 

Correct me if I'm wrong, but the United States isn't sanctioning the importation of food, liquor, or other such goodies.

It is Russia which forbids their importation.

Ergo, anyone who breaks the blockade is going to have to answer to Grandmother Putin.

suteibu's picture

The unstable ruble is causing companies to stop exporting to Russia.  That's the way I read it.  Of course, it stretches credibility to believe the US/West is not causing the weak ruble.

Oracle 911's picture

We will read in the future "Russian food importing and suppling oligarchs sentenced to x years in prison in Chukotka".

nufio's picture

so what is this food group that russia seems to be importing a lot so as to affect the common people. if champagne became more expensive in russia, who gives a shit 

http://atlas.media.mit.edu/profile/country/rus/

from that chart the total food import is less than 2% of russias imports.

So the fall in ruble is probably going to affect germany (selling cars) more than russia. 

Fun Facts's picture

DC/Metro area weather forecast:

Cloudy/Overcast

Wind E 750mph

Temperature 10,000 degrees F

Gamma ray index - stay indoors

JR's picture

"...western banks led by Goldman Sachs had halted liquidity to Russian clients and other local entities."-- Tyler Durden

We have no business allowing Goldman Sachs to use our currency for their criminal activities: assaulting sovereign nations, and squeezing the estates of everyday Americans.

"It is easy to conceive that great evils to our country and its institutions might flow from such a concentration of power in the hands of a few irresponsible to the people.  Controlling our currency, receiving our public moneys, and holding thousands of our citizens in dependence... would be more formidable and dangerous than a military power of the enemy..." Andrew Jackson, 1832

"Whoever controls the volume of money in any country is absolute master of all industry and commerce... and when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate."  President James Garfield

Leopold B. Scotch's picture

Russia far better equiped to tolerate this B.S. than any coddled to death American.  We are panzies vs. most of the world, compared to whom our poorest are pretty darned well off.

caconhma's picture

Putin will capitulate in a matter of the next 3-4 weeks.  He has lost any control of the situation inside Russia.

He will try to negotiate his departure but will end like Libyan strongman Qaddafi.

Freddie's picture

Ha ha!  Outin is still well liked by Russians and the military.  The USA and US Military has been sold out.  Americans are now lower than illegal aliens according to the Democrats and Republicans in Congress.

American boys fighting and dying for Obama when they are lower than illegals by American law.

JR's picture

Exactly. Putin is enjoying a surge in popularity whereby a fresh poll, according to RT, shows “an overwhelming majority of Russians named President Vladimir Putin ‘Man of the Year’ when pollsters asked them to choose from among serving Russian politicians. Obama’s popularity is 40%, mostly an approval rating heavily buoyed by welfare recipients.

http://rt.com/politics/214743-putin-year-man-russia/

in4mayshun's picture

And did your perceptive abilities come by way of MSNBC or CNN?

Augustus's picture

Vlad, the Chessmaster screwed it this time.

http://www.bloomberg.com/news/2014-12-17/putin-s-secret-gamble-bet-on-ukraine-backfires-in-ruble-crisis.html

Those reserves are going fast.  His fellow kleptocrats have onl $50 billion comming due in 2015.  Help them Vlad.  Help them Vlad.  Pillage those pension funds to support the cronies.

Titus's picture

Those reserves can't go fast enough. Dump the fucking dollars already. ALL AT ONCE!

kaiserhoff's picture

But Russians are used to hardship.

They do just fine eating tree bark and snowballs and shit.

I read it on ZH;)

Jlasoon's picture

The average American couldn't go 4hrs without "Soylent Green". I'm sure the Russians will be fine. 

PT's picture

It'll be just like before they had "Free Trade" and "Capitalism".  What was that called again?

I hear they're very good at standing in lines.  Lots of practise.

That doesn't mean they'll be happy.

"First the Communists fooled us.  Then the Capitalists fooled us.  They can both get phukked."

TahoeBilly2012's picture

What's wrong with vodka and borscht? BTW, 50% or more Russian'ss have garden plots and grow food. The hahaha will be when us dumb fucking Yanks get in the same situation those with no skills will starve. Russia is just getting a head start in prepping, that's all.

kaiserhoff's picture

I have always been in favor of "Simple booze."

Single malts, Maker's Mark, varietals.

I feel obligated to consume more to keep the world economy spinning, but that might not be the only thing spinning.

richsob's picture

How are those Russian gardens doing in December?  I've seen the huge gardens outside St. Petersburg but there damn sure isn't anything growing there now.

XitSam's picture

Root vegetables and a root cellar. They've been doing it for hundreds of years.

COSMOS's picture

http://www.organicgardening.com/cook/what-store-root-cellar

Not much growing in the USA in winter time either, I dont see the point.

Ranting Troglodyte's picture

Do they have NBA games in Hawaii?

 

https://whitehouse.gov1.info/blog/blog_post/agenda-hawaii.html

 

Because he deserves it.  He's black or something.

Max Steel's picture

For past few days Tyler is getting worse article source . Vedomosti is like Moscow Times blatant propaganda and spinoffs to show citizens are in panc . Don't fall for it .

TheAnalOG's picture

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Miffed

TheAnalOG's picture

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Miffed Microbiologist's picture

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Miffed

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logicalman's picture

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TheAnalOG's picture

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logicalman's picture

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TheAnalOG's picture

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medium giraffe's picture

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TheAnalOG's picture

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BandGap's picture

https://www.youtube.com/watch?v=DqwvBHiLeF4

 

I guess it's a bad time to talk about the Spirit of Christmas.