Russia will impose “quite substantial” bans on the U.S., Canadian and EU food imports and has already decided to suspend U.S. poultry imports as part of president Vladimir Putin’s order to prepare a list of food import bans, its veterinary service said.
Putin signed a decree on Wednesday banning or limiting imports of agricultural products from countries that have imposed sanctions on Russia because of its support of rebels in Ukraine.
This includes Canada and it could hurt pork exports.
Russia is Canada’s third largest foreign pork market, following the United States and Japan.
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In 2013 Russia bought about $254 million of Canadian pork, or about 10 percent of total pork exports.
That was down from $461 million in 2012. A dispute over Canada’s use of feed additive ractopamine hurt trade in 2013.
January-May exports for 2014 showed that pork exports to Russia were roaring back, with the total for the five months at about $207 million, up 103 percent over the same period in 2013.
Putin ordered his government to come up with a list of goods to be banned for imports into Russia and to last one year, the Kremlin said.
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 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.
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, Dmitry Polevoy, ING chief economist in Russia & CIS, said in a note.
“Even though from political point of view the move may look appropriate, and it will indeed hit countries supplying food to Russia, the move will likely only amplify the effects of financial/sectoral sanctions imposed on Russia,” Polevoy said.
“This will likely add to overall sanction costs via higher food inflation and, so, will have a widespread effect on households,” he added.
Russia imported $43 billion worth of food last year. According to the European Commission, Russia bought 28 percent of EU fruit exports and 21.5 percent of its vegetables in 2011.
It was the second biggest buyer of U.S. poultry after Mexico last year, accounting for eight percent of U.S. chicken meat exports, according to the U.S. Department of Agriculture.
U.S. poultry has been ubiquitous in Russia since the early days after the Soviet Union, when cheap American chicken quarters sold at street markets were called “Bush’s legs” after the president.
Russia has restricted imports of American pork because of the use of ractopamine.
