Russian embargo causes $1bn loss to Ukraine
Russia imposed restrictions on Ukraine on 1 January 2016 after the latter established a free trade zone with the EU. In addition to the ban on food products, the Federal Customs Service of Russia barred any Ukrainian foods from travelling over Russian land to enter Kazakhstan, Kyrgyzstan and other countries.
According to Ukrainian officials, legal transit restrictions were started in July, while unofficial limitations have been taking place since the start of the year.
Ukraine’s Minister for Infrastructure Volodymyr Omelyan said these measures caused losses to Ukraine, adding that the country had considered implementing similar measures against Russia, or challenging the ban via the World Trade Organization (WTO) court. However, Ukraine has only suffered losses from trade limitations, including in the area of meat trade.
Pork exports stopped
Over the first half of the year Ukraine’s pork exports nearly ceased to exist, as supplies collapsed from 36,000 tonnes (t) to only 1,300t due to the Russian embargo, the National Union of Pork Producers in Ukraine has claimed.
Hopes for redirecting export supplies to other countries have been ruined, thanks to the African swine fever (ASF) epidemic.
“There are virtually no exports of pork from the country,” said Food and Agriculture Organization (FAO) analyst in Ukraine Andrey Pankratov. “Any hope of opening new foreign sales markets has not been realised.”
He added that the fall in exports contributed to a reduction in overall production; in the first half of the year it fell 4% year-on-year compared to 2015, as the market sought a new balance between supply and demand.
In 2015, Ukraine exported nearly 70,000t of pork, while this year forecasts from the National Union of Pork Producers suggested this figure would only amount to 15,000t, even though most experts have said that even this goal is unrealistic.
Situation with beef no better
Russia’s embargo has also caused a 40% reduction in beef exports from the country in the period from January-May 2016, an FAO report stated. Ukraine produced 23,300t of chilled beef in the first half of 2016, increasing this figure by 2.8% over the same period in 2015, with the production of frozen beef amounting to 5,200t or 33.6% lower than in first half of 2015.
Meanwhile, FAO analyst Andrey Yarmak, pointed to some positive recent changes as Ukraine has established its first deliveries of beef to Jordan, Iraq and Vietnam, and is negotiating the launch of exports to Saudi Arabia, China and the EU.
“It is possible to export beef to African countries, the Middle East and Asia, especially given the fact that these regions are 75% dependent on beef imports,” Yarmak noted.
According to former veterinary officer Vitaly Bashinsky, in order to establish exports of beef to the EU, Ukraine will have to match 15 requirements, with only nine of them already applied at present.
However, most experts are not optimistic, as exports to the Russian market will take years to replace.
