Why Vladimir Putin Suddenly Has Mushrooms On His Mind
One effect of Russia's embargo on Western food products is the disappearance of imported Polish mushrooms. Microcosm of economic warfare around a Russian culinary tradition.
MOSCOW — There were two scandals related to imported mushrooms brewing at the end of August.
First, Russian President Vladimir Putin announced that mushrooms from Poland (which is on the list of Western countries not allowed to export food to Russia) were in fact making their way to Russian grocery shelves.
"It says, ‘country of origin: Belarus.’ But if you take off the sticker, it says Poland," the president declared.
He offered as proof a photograph of a box of Belarus mushrooms, whose sticker covered a label stating the mushrooms were from Poland. But after an investigation, the reputation of the Belarus exporter was untarnished: Apparently, they used recycled packaging that had once held Polish mushrooms. Belarus can buy — and eat — as many Polish mushrooms as they want.
At the same time, a truck with 17.2 tons of fresh mushrooms was stopped at the border with Belarus. The driver, an employee of a Russian company, gave the customs agent documents saying that the mushrooms came from Macedonia. During the verification process, the documents proved to be false, and the mushrooms were Polish.
It came as little surprise. That's because, before the food embargo, Polish mushrooms represented a huge percentage of the Russian market. "In total, imports account for more than 90 percent of consumption," says Aleksandr Khrenov, general director of a mushroom-production company.
Given this market situation, and Russia's famous love affair with mushrooms, it's clear that forbidden produce were going to slip into Russian stores no matter what.
"We're already seeing these strange mushrooms from Macedonia," Khrenov says. "But we know that there isn't serious mushroom production there. Ukrainian mushrooms have been coming into the Russian south, and there are talks of mushroom imports from Georgia and Armenia. There is some production in Serbia. Maybe that's where the deliveries are from."
For many companies, though, champignons, often called "button mushrooms," have simply disappeared. "We tried to order frozen champignons from China," says Artem Nikolaev, general director of a mushroom-import company. "But the Chinese mushrooms were more expensive and lower quality than the Polish mushrooms."
For consumers, this means that cultivated mushrooms have gotten more expensive, by 30%, on average. Nikolaev says that the prices will continue to rise, because Chinese producers know the Russians have no other place to turn, so that they can set their own price. In addition, Russian importers have also lost advantageous financial conditions.
"The Poles let us pay 30 to 120 days after delivery," Nikolaev says. "We could basically get inventory for free. We just paid for the transport and the customs."
Nikolaev says that two years of an embargo would be enough for the domestic producers to catch up. "Now is a good time to develop domestic mushroom cultivation," says Pavel Afonin, general director of Mozhaiskii Champignon, a domestic champignon producer. "It's about the costs. Right now, we have costs of $2 to $3 per kilogram, the Poles have costs of around $1.50 to $2." The price increases since the start of the sanctions have made it easier for his company to compete.
The dark blue hangar is a long, seemingly endless corridor. There are massive iron doors on the walls. Behind each one is a champignon cultivation chamber. Mozhaiskii Champignon has 12 chambers, covering a total of 2,700 square meters. In front of me, one of the doors opens, and the place is filled with the smell of fresh mushrooms.
Each chamber is a long, square room. There is an enormous rack, where compost briquettes laced with mycelium are stacked one over the other. In one room, the champignons have just started to grow, in another they are already being harvested. There is strict climate control, and the walls and ceilings are hung with numerous sensors and tubes.
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Kostroma market (Photo - Michael Clarke)
It's a high-tech system that can be controlled by smartphone. Irina Tsareva, the main technician, recently corrected the temperature in the chambers while on a business trip in Italy. Without this control, the harvest could die in hours.
The main problem for Russia's producers is the raw materials. Mozhaiskii Champignon buys compost in Belarus, and sometimes in Holland and Poland, whereas the Poles use their own compost. "More than 50% of our costs are on compost, whereas the Poles only spend 25% to 30%," Afonin says. "We need to create our own, but it's only worth it if we can increase production. We have to produce at least 500 tons of compost per month for a compost factory to be worth it, and we only need 120 per month now."
The new champignon niche that the food embargo has attracted investors. One holding company has announced it will be building a massive champignon factory in Kaliningrad, and it plans to produce 2,500 tons of mushrooms per year. If it is indeed built, it would be among the largest in Russia. There are only 22 companies, with an overall production of at least 500 tons per year, and only three with annual production exceeding 1,000 tons.
The Russian mushroom market is unique in that cultivated mushrooms were rather exotic in Russia until recently. But Russia is a mushroom-loving country, and it consumes two million tons of wild mushrooms annually, most of which are collected in the forest by the consumers themselves. But those wild mushrooms are rarely sold fresh, and are only available seasonally, Krenov says.
Even though companies that sell wild mushrooms are also ramping up production, it's a totally different market. If Russia can't find a way to source or produce mushrooms, it might have to do without this fresh produce year-round.
It's hardly war or famine, but the effects of retaliatory economic sanctions between Russia and the West are spreading every day.