Russia’s import ban on meat, fish, cheese, vegetables and fruits, milk and milk products will have major consequences for trade relations with the neighboring countries. For Norway, the ban will deprive the country’s salmon exporters of their biggest market. Russian consumers in 2013 bought 295 thousand tons of Norwegian seafood products, 81 percent of it salmon. Every week, an average of 134 trucks loaded with fresh Norwegian salmon and trout crossed the Russian border, the Norwegian Seafood Council informs. The seafood trade in 2013 had a value of 6,5 billion Norwegian kroner (€775 million).
The seafood exporters still believe that the ban can be handled. Commenting on the situation, CEO of the Sea Food Council, Terje E. Martiniussen, underlines that the seafood market is global and that alternative markets will be found.
”This is a challenging situation for Norwegian seafood exporters. However, the Norwegian seafood industry has long experience of tackling trade barriers in Russia, and are thus prepared for such situations”, he says in a press release.
For Finland, the ban will add to the burden of an already seriously hit export industry. Finnish dairy products account for about 87 percent of the country’s food exports to Russia. The value of the food exports in 2013 amounted to €400 million.
“I am very concerned about the effects of the Russian retaliatory sanctions on individual companies. I will personally visit the companies that are hit the hardest by the measures,” Minister for European Affairs and Foreign Trade Lenita Toivakka says in a government press release.
Valio, one of the country’s biggest dairy producers, has now “halted all production lines making goods for sale in Russia,” Chief Executive Officer Pekka Laaksonen told Bloomberg.
A total of 14 percent of Finland’s international trade is linked with the eastern neighbor. ”This has the potential - and I stress potential - to become economic crisis 2.0,” Prime Minister Alexander Stubb told journalists, Euractiv.com reports
However, ultimately, the export ban will hit hardest on Russian industry and consumers themselves. Russian economy was even before the annexation of the Crimea about to enter a stage of zero-growth. Now, a recession is in the pipeline.
The EU and U.S. sanctions adopted in July are hitting hard on several Russian sectors and the economic effect will hurt the Russian economy by €23 billion this year (1.5% of its GDP) and €75 billion in 2015 (4.8% of its GDP), experts told EUobserver.
The food import ban will hardly bring anything good for the Russians. Over the last two decades, Russia has imported major volumes of foodstuffs and Russian producers will not be able to replace the banned products anytime soon. The result could ultimately be empty shelves in Russian supermarkets.
”Russians are the biggest loosers, and not Norwegian industry”, Geir Ove Ystmark, leader of the Norwegian Seafood Federation says to Nord24.no. He believes the loss of Norwegian herring will have major consequenses for the Russians. ”The herring is the most important source of protein for a key part of the Russian population”, he adds.
Russian authorities still appear confident that it will be able to cover demands with domestic production. In a government meeting on the issue Minister Dmitry Medvedev said that he is ”confident that the Russian market will be filled with our [own] fresh and high-quality products, which are preferred by many Russians to foreign [products]
