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Russia Blocking U.S. and E.U. Food Imports

Russia Blocking U.S. and E.U. Food Imports


Russian President Vladimir Putin has ordered one-year limitations on food and agricultural imports from countries that have imposed sanctions against Russia over its actions in Ukraine.

Dmitri A. Medvedev, Russia’s Prime Minister, announced that Russia will ban all beef, pork, fruit, vegetables and dairy products from the European Union, the United States, Canada, Australia and Norway for one year.

“We hoped until the very last that our foreign collegues would realize that sanctions are a dead end and that nobody needs them,” Mr. Medvedev said.  “Things have turned out in such a way that we have to implement retaliatory measures.”

The Associated Press reports that White House spokeswoman Laura Lucas Magnuson decried the import ban, saying "Retaliating against Western companies or countries will deepen Russia's international isolation, causing further damage to its own economy."

Food and agricultural imports from the U.S. amounted to $1.3 billion last year, according to the U.S. Department of Agriculture.

The most noticeable American food import to Russia is chicken, and that only accounts for 7% of U.S. poultry export volumes, according to the New York Times.  The National Chicken Council said in a statement, “As its domestic poultry industry has expanded, Russia has in recent years become less important as an export market.”

In an emailed statement to reporters, the American Farm Bureau Federation President Bob Stallman 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."

Food trade with Russia has already been at peak levels with Russia issuing multiple bans over the past two years.  According to the German Farmers’ Association, German pork totaled 83,000 tons in the first four months of 2013 but fell to just 9,000 tons over the same period this year.

The Associated Press reports that this retaliation could hurt Russia as much as the West with high inflation rates.  Chris Weafer, an analyst at Macro Advisory in Moscow told the AP that, “Along with higher interest rates, higher food costs will mean that households have less money to spend and that will depress the economy.”

For now, we will have to wait and see what effects these bans will have on U.S. food and agricultural exporters.  Stay tuned to DeliMarket TV as we continue to track this ongoing story.