Ruble's crisis generates feast for the eyes only Ample imported foods find no buyers amid collapsing economy

Slow day at trade show

September 23, 1998|By Will Englund | Will Englund,SUN FOREIGN STAFF

MOSCOW -- All would seem right with Russia to anyone who parachuted into the World Food Moscow trade exhibition, which opened here yesterday with rows and rows of gleaming and succulent displays of edibles from around the world that no one will buy.

Spilling through four large halls in a country that imported half its food last year, a show designed to bring buyers and sellers together looked for all the world like business as usual. Except for one thing -- there was no business.

At the moment, there is virtually no imported food coming into Russia. No one dares to buy it. No one dares to unload it. No one dares to distribute it. With the banks frozen, no one can pay for the food, and even if they could, no one would know what to charge in a country where in less than a week the ruble could gain -- or more likely could lose -- much of its value.

"The only people stopping by are coming for the free pens," said Richard Ali, director for Russia of U.S. Meat Export Federation.

But a Ukrainian accordion ensemble lent a merry air, and someone dressed up to look like an Israeli orange strolled around bumping into people. Gloom there wasn't. Only optimists set out to do business in Russia in the first place, and the prevailing sentiment was uncomplicated: Somehow, something has to happen.

Exhibitors, distributors and wholesalers had all turned out for their annual get-together, to show the flag if nothing else, in hopes of better days to come. They slapped each other on the back, huddled over cups of coffee, strolled down lanes of beef and pork, of chicken and Brussels sprouts, of tea and bourbon, of crabs and pears, of cat food and baby food, of Argentine grapes and Hungarian salami.

It was a feast for the eyes that won't translate to the table. Outside the exhibit halls, the only imported food for sale in Russian stores is from shipments that arrived before Aug. 17, the day the ruble was devalued. More is sitting in warehouses, held back by anxious distributors who are selling only a trickle so as not to lose too much money at once. But conversations here yesterday suggest that even that supply will run out by November.

"Then things could get desperate," said Ali.

"The pipeline is empty," said Carlos Ayala, directer of international operations for Perdue Farms, of Salisbury, Md.

Predictions of hunger in Russia have a way of not coming true. Even when the shelves were completely bare, as they were in 1991, Russians weren't going hungry. Food was being sold out the back door and from the tailgates of farm trucks, people were harvesting potatoes at their dachas, importers who didn't care to pay taxes or risk jail for speculation were bringing in commodities on the sly.

The difference now is that even smugglers have to have money -- and there just isn't any, besides the billions of rubles that have been frozen or have vanished in the continuing economic crisis.

And there's the harvest -- which is shaping up as the worst in more than 30 years. Farmers will bring in half as much grain as they did last year. Sugar beet production is down only slightly from last year, but that was the worst year in three decades.

Potatoes are few and of poor quality. If the government continues to flail, said one seller here, "we could be looking at something like the Irish potato famine."

Russia does have large stocks of grain left over from 1997, so that prediction of doom may have been a little alarmist. But even Russians don't live on bread alone.

More than 850 companies from 48 countries are here at the exhibition, and they are aching to do business. U.S. firms alone sold $1.2 billion in food here last year. Poultry amounted to more than two-thirds of the total; 7 percent of the chickens raised in the United States ended up in Russian pots.

But it takes eight weeks for a chicken to get from a farm on the Eastern Shore of Maryland to a store in Yekaterinburg -- and that means eight weeks of financial risk before the chicken turns into rubles, and maybe two weeks more before those rubles turn into dollars.

Neither the Russian buyers nor the U.S. suppliers are willing to take that risk right now.

In fact a dozen ships carrying frozen food are reported to be anchored outside Baltic ports. It's cheaper to pay $5,000 a day to keep a ship at sea than it is to unload it and get sandbagged by frozen payments and a sliding ruble. The ports are empty. The sea lanes are full.

Something, the thinking goes here, has to happen.

"From a political point of view, whoever's in power, they're going to want to keep the people fed," said Ayala. Since Russia only produces half its food, the country will have to turn again to imports, he said.

"Well, it depends on the government -- but they haven't even formed a government yet," said Vladimir Kaminsky, of a New York seafood dealer called International Gold Star Trading Corp.

"Until then," said Kaminsky, "I can't say anything about anything."

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