Europe divided

Russia to extend EU embargo until late 2017

By Niamh Michail contact

- Last updated on GMT

Arkady Dvorkovich: 'I think these documents will be approved unless some miraculous changes occur in the geopolitics.' ©iStock
Arkady Dvorkovich: 'I think these documents will be approved unless some miraculous changes occur in the geopolitics.' ©iStock

Related tags: Vladimir putin, Russia

Russia’s embargo of EU food products will be extended until the end of 2017 but the list of banned foods or countries affected will not change, according to a draft government decree.

The government does not intend to widen the list of banned food imports, which currently affects fruit, vegetables, meat, poultry, fish, milk and dairy, nor increase the countries affected by the ban, the agriculture minister Alexander Tkachev said on Friday.

"The Russian Agriculture Ministry has already started to prepare the draft decree providing extension of the response measures until the end of 2017. The list of agricultural products is not planned for expansion, we are talking only about extending the duration,"​ he said.

The embargo had been set to end this summer.

The draft decree will be submitted to President Vladimir Putin for approval, according to Russian state news agency Tass which reported deputy Prime Minister Arkady Dvorkovich as saying: "The embargo is currently effective until the end of August. I think these documents will be approved unless some miraculous changes occur in the geopolitics."

Tkachev said the extension of the embargo was “good news for domestic agricultural producers”. ​However, a report by the Commission in autumn 2015 found that Russian producers were not able to keep up with demand for certain products, notably cheese and dairy.

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Vegetable trade: Ban extended by Russia. ©iStock

On the demand side, Russian consumption and imports remain below last year because Russia could not compensate for the reduction in cheese imports from ‘banned’ countries neither by importing more from other countries nor by producing more domestically,”​ said the report.

“Recently, processing plants in New Zealand have been allowed to export again to Russia, but no major cheese flow is expected. It seems that the production of cheaper analogue ‘cheese’ (based on dairy proteins and vegetable fat) is developing instead.”

According to EU data, exports to Russia fell by 43% - a loss of around €4.4 billion – between August 2014 and June 2015 compared to the same period one year before, although these losses have been somewhat compensated the increasing exports to other countries, such as the USA, China, Hong Kong, South Korea and other Asian markets.

Embargo impact

In November last year, Euromonitor analyst, Kinda Cheib, told FoodNavigator that Italy, Spain, France and the UK were likely to lose less than 1% in export revenue due to the continued ban with smaller countries being hit hardest. “Smaller countries such Estonia are expected to be the most impacted. The country is projected to register about 16% decrease in revenue from exports.”

In August last year Russia extended the ban to include Iceland, Liechtenstein, Albania and Montenegro.

In 2013 Russia was the second most important agri-food export destination for European countries, representing around €11.6 billion.

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