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Sanctions War: Who Benefits from the Food Embargo
August 16, 2019 17:41


(Source: https://mtdata.ru/u19/photoA93C/20304202686-0/original.jpg)
Five years ago (on August 6, 2014), Russia imposed retaliatory sanctions against the countries of the European Union, the USA, Canada, Australia, and Norway. 

By a decree of the Russian President, a ban was imposed on the import of fish, meat, vegetables and fruits from the EU, USA, Canada, Australia and Norway into Russia. Everything that could get to the market from this list past customs was to be destroyed. The annual volume of imports that fell under the food embargo was then estimated at $ 9 billion. So, Russian consumers immediately lost high-quality European products, and the domestic agro-industrial complex got a chance for recovery and growth.

Over five years, agricultural production in the country has grown by more than 20%. “This is called a breakthrough without exaggeration,” Vladimir Putin said at a meeting in autumn 2018.

Import substitution occurred on the food market, but, as noted in the KPMG report, the consumer paid the highest price for this, since the embargo limited access for cheap imported products to Russia, and the devaluation of the ruble significantly increased the cost of Russian production.

Read More Articles about Russian Business

Domestic agribusiness is still heavily dependent on state support (56 kopecks of state funds fall on 1 ruble of investments in agricultural projects) and  imports (equipment, feed, seed). KPMG experts warn that in certain categories,  if sanctions are lifted, Russian products run the risk of losing their competitiveness. But the sanctions war continues, and  its five-year results are below.

Fruits

Import*:
2014: $ 5.4 billion. Largest suppliers: Ecuador, Turkey, China, Poland, Spain.
2018: $ 5 billion. Largest suppliers: Ecuador, Turkey, China, Azerbaijan, Egypt.
The security of Russia due to domestic production **:
2013: 31%
2018: 33%
Growth in average consumer prices since 2013:
Apples: 35%
* Source: International Trade Center
** Source: KPMG

Vegetables

Import:
2014: $ 3 billion. Largest suppliers: Turkey, China, Israel, the Netherlands, Egypt.
2018: $ 1.8 billion. Largest suppliers: China, Azerbaijan, Belarus, Israel, Egypt.
The security of Russia due to domestic production:
2013: 83%
2018: 85%
Growth in average consumer prices since 2013:
Cabbage: 62%

Meat

Import:
2014: $ 5.5 billion. Largest suppliers: Brazil, Belarus, Paraguay, Canada, Argentina.
2018: $ 2 billion. Largest suppliers: Belarus, Paraguay, Argentina, Brazil, Chile.
The security of Russia due to domestic production:
2013: 77%
2018: 93%
Growth in average consumer prices since 2013:
Beef: 35%
 
Fish
 
Import:
2014: $ 2.6 billion. Largest suppliers: Norway, Chile, China, Iceland, Faroe Islands.
2018: $ 1.8 billion. Largest suppliers: Chile, Faroe Islands, China, Belarus, India.
The security of Russia due to domestic production:
2013: 68%
2018: 81%
Growth in average consumer prices since 2013:
Frozen fish: 68%
 
Milk products
 
Import:
2014: $ 3.8 billion. Largest suppliers: Belarus, the Netherlands, Finland, Argentina, Uruguay.
2018: $ 2.3 billion. Largest suppliers: Belarus, Argentina, Uruguay, the Netherlands, New Zealand.
The security of Russia due to domestic production:
2013: 76%
2018: 84%
Growth in average consumer prices since 2013:
Butter: 79%
 
Cheese
 
Import:
2014: $ 1.6 billion. Largest suppliers: Belarus, the Netherlands, Lithuania, Finland, Argentina.
2018: $ 0.97. The largest suppliers: Belarus, Argentina, Serbia, Switzerland, Uruguay.
 

 




Author: Anna Dorozhkina

Tags: Russian business Russian economy Russian companies   

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