PM: Exporters to Russia must have backup plan

Today, Russia released the detailed list of prohibited import goods, which establishes a blanket one-year ban on EU, US, Australian, Canadian and Norwegian meat, seafood, dairy products and produce. The Estonian head of government maintained that Russian consumers would suffer most, while Estonian agriculture as a whole would not be deeply impacted, but said Estonian export businesses should have have a plan B in place for the next year.

Estonian Prime Minister Taavi Rõivas said at today’s Cabinet press conference that Estonian agriculture would suffer less than the business sector.

“It’s too early to say what the impact on Estonia will be, but of larger categories of goods, 24 percent of dairy exports go to Russia. Export to Russia makes up 5.5 percent in the case of meat products and close to 9 percent for vegetables.”

According to Postimees, Estonia’s total export to Russia in 2013 across all types of goods starts with 127.7 million euros in drinks and beverages to Russia, followed by 50.2 million euros in milk and dairy products, 15.0 million euros in fish products, 12.1 million euros in grain, starch and milk-containing products, and 11.5 million euros in other foodstuffs. Other categories, including non-food items, were at 5 million euros or less.

Read more from ERR News

Port of Tallinn seeking new leaders

State-owned Port of Tallinn has announced a competition for the CEO spot, and for a board member, a day after another state giant, Eesti Energia, said it was looking for candidates to lead its company.

Ain Kaljurand, the current CEO of the Port of Tallinn, has been in the firing line before, when his job was subject to a dispute between IRL and the Reform Party, then-government coalition members.

Three years ago the supervisory board chairman Neinar Seli, now only a member of the Supervisory Board, blocked the move. Seli himself has received heat as he supported the company’s sponsorship policies, while also being the chairman of the nation’s Olympic committee.

The company also came under fire in 2012 for work that was being done on the Port of Muuga, saying that the company had caused 2.4 million euros in losses to the state by exceeding its budget in the construction of a quay for the container terminal in Muuga Harbor. That work has now been completed.

The Port of Tallinn announced Tuesday it had seen record traffic and profits at its port facilites in the first six months of the year. The company said it had experienced a 16 percent rise in profits and a 7 percent increase in turnover in that period, and a 5 percent growth in passenger traffic.

Requirements for the top job at the company are a little less stringent compared to Eesti Energia, with only five years experience asked for as the head of a large organization, instead of six for the energy giant, and a higher education degree, not a MBA.

Source: ERR News

Government approves 600 mEUR transport reconstruction plan

The Cabinet approved on Thursday a number of transport-related projects, including tackling two traffic bottlenecks in Tallinn by 2017.

Two grandest projects are a road from the Russalka statue between Kadriorg and Pirita in Tallinn to the port, and the reconstruction of the Haabersti roundabout, Estonia’s most dangerous intersection for accidents.

Besides the two projects, which according to Economic Minister Urve Palo, would cut morning and evening traffic jams, the capital’s tram line will be extended to the airport.

Investments will be made into increasing railway line speeds to 120 kilometers per hour on passenger routes. Regional ports and ferries servicing islands will also get an injection.

The 600 million euro package of projects is, in essence, an action plan to use EU funds, and the basis for the creation of the next state budgets in the field of transportation.

Source: ERR News

PKC Group to close its plant in Haapsalu

International manufacturer of wire harnesses PKC Group that has two plants in Estonia in Keila and Haapsalu announced that it is going to close down its plant in Haapsalu by the end of this year.

The company said that its objective is to maximise the production capacity in Europe in modern competitive factories in Serbia and Lithuania.

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Tallink charters its cruise ferry to Australia

Estonian listed ferry group Tallink and Bridgemans Services Ltd. have entered into a charter agreement to charter Tallink’s cruise ferry Silja Europa to Australia from August
2014 as an accommodation vessel.

The period of the charter is at least 14 months with an option to extend up to 48 months.

For Tallink, the deal means that M/S Baltic Queen which is operating on Tallinn-Stockholm route will change to Tallinn-Helsinki route on 7 August 2014 and M/S Romantika which is operating on Riga-Stockholm route will change to Tallinn-Stockholm route. M/S Isabelle will continue the service on Riga-Stockholm route.

Read more from BBN

Doubts over data warehouse project

The ambitious plan that is backed by Finnish businessmen and is being promoted by leading IRL politician Eerik-Niiles Kross to build Europe’s largest data warehouse in Estonia raises doubts, writes Delovye Vedomosti.

Dmitri Kostenko from Web Solutions Hosting Ltd says that he is sceptical about the feasibility and cost estimations of the project.

„One questionmark is the cost of the project at about 3,000 euros per square metre. For a turnkey project, it is not enough,” Kostenko todl DV.

„They have also said it would be built either in Muuga or in Paldski which means that it will have water and air cooling which will add notably to the total cost,” he added.

Kostenko adds that such data warehouses are considered low-profit investments which may make it diffficult to attract enough investors for the project.

„Estonia’s own data needs are too small for the capacity of its server stations which means that it would not be feasible without international business,” he added.

Also , according to the project manager Jussi Vartiainen, the decision whether to build the data warehouse in Paldiski or Muuga will be made in October after the European Commission decides on the funding of Balticconnector gas pipeline and LNG terminal because the facility will require significant gas supply.

Read more from BBN

The prices of potato and sugar have decreased the most

According to Statistics Estonia, the change of the consumer price index in July 2014 was –0.2% compared to June 2014 and –0.4% compared to July of the previous year.

Goods were 0.7% cheaper compared to July 2013 and services were 0.1% more expensive.

Regulated prices of goods and services have risen by 0.3% and non-regulated prices have fallen by 0.7% compared to July of the previous year.

Compared to July 2013, the consumer price index was influenced the most by 23% cheaper vegetables. 2.9% cheaper electricity, heat energy and fuels, 13% cheaper mobile communication services, and alcoholic beverages and tobacco, the prices of which have increased 2.1% and 6.2%, respectively, also had a bigger impact on the index. In July, compared to July 2013, motor fuel was 0.6% more expensive. In comparison with the same time of the previous year, of food products, the prices of conserved milk have increased the most (15%) and the prices of potato and sugar have decreased the most (42% and 32%, respectively).

In July, compared to June, the consumer price index was influenced the most by widespread sales of clothing and footwear. The 2.9% more expensive electricity that arrived at homes and nearly 10% cheaper fresh vegetables also had a bigger impact on the index. Compared to June, of food products, the prices of Chinese cabbages and fresh cabbages decreased the most (42% and 26%, respectively) and the prices of strawberries increased the most (22%).

Change of the consumer price index by commodity groups, July 2014
Commodity group July 2013 –
July 2014, %
June 2014 –
July 2014, %
TOTAL -0.4 -0.2
Food and non-alcoholic beverages -2.0 -0.5
Alcoholic beverages and tobacco 3.2 -0.4
Clothing and footwear -0.1 -4.7
Housing -0.5 1.2
Household goods 0.7 0.0
Health 2.6 0.3
Transport -1.3 0.0
Communications -5.9 -0.6
Recreation and culture 2.3 0.0
Education -14.3 0.0
Hotels, cafés and restaurants 3.6 0.4
Miscellaneous goods and services 2.3 0.0

 

Source: Statistics Estonia

Deflation continued in Estonia in July

In July, consumer prices decreased by 0.4%, year-on-year, and 0.2%, month-on-month. Regulated prices rose by 0.3%, non-regulated prices declined by 0.7%, yoy. Regulated prices were pushed up by increased prices of alcohol and tobacco after the excise tax hikes at the beginning of the year.

Food prices declined more than expected. Warm weather and lower prices of electricity network fees led to cheaper electricity and heating. The prices of transportation, mobile communication services, and higher education also declined. Motor fuel was a bit more expensive than in July last year despite cheaper euro and declined oil prices globally.

Inflation should accelerate in the second half of the year. We expect food prices to rise and euro to weaken. The impact of free higher education, implemented last autumn, will also disappear from September onwards.

Eurozone inflation decelerated to 0.4%, year-on-year, in July, the lowest level in 4 and a half years. Nevertheless, we expect the ECB to refrain from further monetary policy action at today’s meeting as the impact of their previous policy measures are still to unfold.

Source: Swedbank