Russian ban of food imports not surprising

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Russia will impose "quite substantial" bans on the U.S. and European Union food imports and is quickly deciding what commodities and foods will be banned as part of President Vladimir Putin’s order to prepare a list of food import bans, it was announced Wednesday.

Putin signed a decree on Wednesday banning or limiting imports of agricultural products from countries which have imposed sanctions on Russia because of its support of rebels in Ukraine. Putin ordered government officials to come up with a list of goods to be banned for imports into Russia. The ban is to last one year, the Kremlin said.

The decree instructs officials to come up with measures to stabilize commodity markets and prevent food price increases after the list of banned products has been compiled. The list is expected by end of day Thursday.

Russia's Veterinary and Phytosanitary Surveillance Service (VPSS) will ban the U.S. poultry imports, VPSS spokesman Alexei Alekseenko told Reuters on Wednesday evening. He declined to say (and was unlikely to know) what other products would be included in the list, but said the ban on the U.S. and EU food imports will be large. Russia imported $43 billion worth of food last year.

"In relation to the U.S., the country which was imposing sanctions, the decision (on food import bans) will be quite substantial," Alekseenko said. The same "of course refers" to the European Union, he added. The EU added its own harsher sanctions on Russia recently to protest Russia’s handling of the Ukraine situation and possible involvement in downing of the Malysian airline.

Apart from boosting local production and expanding cooperation from sanction-resilient countries, Putin's decision may well become a self-made sanction on the population. Russian officials reportedly are holding consultations with Ecuador, Brazil, Chile and Argentina on expanding imports to Russia.

But Western speculation is that the ban will likely amplify the effects of financial/sectoral sanctions imposed on Russia. There could be food cost increases for the general population.

As an interesting side note, one Russian official was quoted as saying wine and baby food will “definitely not” come under import sanctions.

Bob Stallman, president of the American Farm Bureau Federation, said, “This is clearly a political move. It is unfortunate that the biggest losers in this will be Russian consumers, who will pay more for their food now as well as in the long run.

“America’s farmers and ranchers would have been more surprised if Russia’s leaders had not announced bans and restrictions on food and agricultural imports. They do so regularly for seemingly small reasons and now they have to deal with sanctions imposed by our nation and others.”

The organization representing farmers growing the largest commodity export to Russia, soybeans, was quick to respond to the Russian ban. The American Soybean Association provided a comment from its president Ray Gaesser.

“Russia is a key trading partner for U.S. agriculture, and the Russian people are our customers like so many others in the world’s emerging markets. However, we would add that Russia, while very important, is only one of hundreds of our customers worldwide. By limiting his people’s access to American soybeans and other products, he (Putin) does a great disservice to his Russian countrymen and women,” Gaesser said.

“While we certainly want to see a key market protected, it is equally important for American farmers to demand a higher standard from our trading partners. In this case, that standard is not being met, and we urge President Putin to rescind this ban.”


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