Russian Ban on Food Imports To Continue Beyond August
06 May 2015 --- A Russian ban on all EU imports, which has affected the worldwide food industry since its implementation last August, is likely to be extended.
According to the European Commission, the EU exports around 10% of its food products to Russia -- business worth about €11 billion a year. Of this, €1 billion is from Lithuania alone, while the other countries most affected are Poland, Finland, Greece and Spain. The European Commission has introduced some stopgap measures that should help producers in those worst-hit countries.
The ban has had a significant negative affect on many European industries, most notably the dairy industry, which relies heavily on Russian imports. The EC has offered help to European dairy producers, but for some it is not enough.
Last year Finnish dairy cooperative Valio made a reported loss of $432m as a result of the import ban, and has recently announced another 320 job cuts, the third round of job cuts since the ban was implemented. Whilst Valio has suffered particularly badly, there are many others facing similar problems.
However, lifting the export ban does not seem likely in coming years, as Russia is reported to be working on becoming almost entirely self-sufficient in food by 2020. It recently announced heavy investment in its agriculture industry.
A report by news agency Reuters said that while EU sanctions continue, a removal of the ban, which is thought to have cost the EU $9bn so far, is unlikely. A Kremlin spokesman said that much will depend on an EU summit in June when the future of the sanctions imposed on Russia will be discussed.
Analysts said an easing of the economic situation had also helped the case for the food ban, which spurred food inflation in late 2014 when the rouble plunged. The currency has since stabilized, making food imports less expensive.
