Russia’s ban on imports from Europe and the US has forced many exporters, particularly from Eastern Europe, to offer incentives to emerging markets such as the Middle East, in order to offload food and agriculture products. At the same time, Russian traders, now prevented from selling to or buying from Europe and the US are also eyeing the region.
EU struggling
Last month the Ministry of Agriculture in Poland, for which Russia was a major export market, offered discounted insurance for Middle East importers buying products affected by the Russian embargo, including apples, cabbages, peppers and sprouts. The 20% discount is valid until the first quarter of 2015, and covers all six GCC states, Egypt and Iran, as well as countries in North Africa and Asia.
Officials across Europe have been working to assess the impact of the sanctions since they were imposed, and identify alternative markets for food producers. In an August interview with local media, Austrian agriculture minister Andrae Rupprechter singled out the Middle East as one such market to target.
European food producers are able to take advantage of an EU scheme, established in April, which offers up to 50% subsidies of promotional campaigns for certain Europe-produced food products in markets including the Middle East.
Ukraine eyes Saudi Arabia
Ukraine, the site of the conflict which triggered the sanctions, is also looking to increase its exports, particularly of poultry, to the Middle East, despite a Saudi Arabian ban on Ukrainian imports. According to Food Navigator’s sister publication Global Meat News, a Saudi delegation met Ukrainian officials last month, and expressed support for re-opening trade in poultry products.
“We are very interested in cooperation with Ukraine. Ukraine reveals itself as a reliable partner. Also, we see the desire of your state for the introduction of European standards. Therefore, we are ready to increase the supply of Ukrainian food products,” said Mohammed Alblovi, head of the Saudi delegation, quoted in GMN.
Russia has also turned to markets such as Egypt, both for imports and exports, following the imposition of sanctions. At the end of September Egypt’s agriculture minister Adel El-Beltagy met Russia’s ambassador to Egypt, and announced Russia’s intention to import more than 60 agricultural products from Egypt, mostly fruit and vegetables.
Speculation that sanctions may impact the global wheat trade has not proved to be correct to date. Current wheat prices are at four-year lows according to Gleadell, and Russia has currently stopped all wheat exports because of high domestic demand.