Hungry Russia builds new economic ties
The sanctions, which the EU and the United States imposed on Russia, led to responsive measures. Russia restricted imports of food from the countries that imposed the sanctions. Meanwhile, Western sanctions against Russia and Russia's sanctions against the West may become a favorable opportunity for Turkish, Argentine and Egyptian exporters.
Russia is now forced to search for new suppliers of the products that it no longer wants to import from several countries. The fact that Russia is a net importer of mainly fresh vegetables, fruit and meat products may give Turkish and Argentine exporters an opportunity to expand access to the Russian market.
In particular, Russia's decision to ban imports of a number of agricultural and food products offers great opportunities to expand supplies of meat and dairy products from Argentina.
"The opportunity to increase agricultural exports to Russia is very good news for us," the President of the Consortium for the export of Argentine meat, Mario Ravettino said.
The consortium unites major Argentine meat-packing companies. Beef, dairy products, pork, poultry, fruit, vegetables and seafood were included on the list of goods that Russia was ready to buy from Latin America. Ravettino believes that the Russian market is now open to expand purchases of meat from Argentina. Currently, there are many meat-making companies that work with Russian importers.
Russia mainly buys chilled and frozen beef. Unfortunately, despite the fact that last year supplies of beef to Russia increased by 18 percent, the amount of shipments is still insignificant. Argentina sells from 6,500 to 8,000 tons of beef per year for as low as $3,600 per ton. Still, it pales in comparison with the amount of beef that Argentina supplied to Russia a decade ago, when exports amounted to 150 thousand tons, said Ravettino.
At the same time, the president of the Consortium for the export of Argentine meat does not harbor high hopes for the future, as possibilities of Argentine meat exports are limited due to the reduction of livestock and restrictions on the export of up to 6 percent of produced meat. Almost all of the beef produced in the country goes to the local market to prevent the growth of domestic prices on meat.
However, Argentina can increase exports of dairy products to the Russian market in the amount of $250 million. First of all, it concerns cheeses. Argentina also exports 4,000 tons of butter, the lion's share of which goes to Russia.
Turkish exporters also see interesting prospects in new trade relations with Russia. According to the Statistical Institute of Turkey, Turkey's exports to Russia in 2013 made up $7 billion. Of these, 1.2 billion accounted for articles of Turkish exports corresponding to the products, against which Moscow imposed retaliatory sanctions.
Ecuador's President Rafael Correa said Tuesday that his country would not ask anyone's permission to supply food products to Russia.
"I just want to say that we do not need permission from anyone to sell food to friendly countries. As far as we know, Latin America is not a part of the European Union," Correa said.
Spanish newspaper El Pais wrote that EU countries were unhappy with the intention of Latin American countries to arrange the supplies of food products to Russia.
Earlier, Ecuador's Minister for Foreign Trade Francisco Rivadeneira said that the government was studying the possibility to increase exports to the Russian Federation.
Last week, the head of Russia's federal agency for agricultural control, Rosselkhoznadzor, Sergey Dankvert, and Ambassador of Ecuador to Russia, Patricio Alberto Chavez Zavala, discussed the prospects of increasing the volume of deliveries of Ecuadorian food to the Russian Federation.
According to the Embassy of Ecuador in Moscow, Ecuador's exports to Russia - mainly bananas and roses - brings second largest non-oil revenues to Ecuador. In the first five months of 2014, the country delivered to Russia 580,000 tons of bananas and 9.3 thousand tons of roses.
Meanwhile, Russia and Egypt explore a possibility of establishing a free trade zone. This was announced by Russian President Vladimir Putin said after talks with his Egyptian counterpart Abdel Fattah al-Sisi.
"We have reached an important agreement on the establishment of cooperation between Egypt and the Customs Union," said the head of Russia. "Now we are studying the possibility of establishing a free trade zone," said the president.
Putin added that Russia and Egypt agreed on the introduction of a simplified regime for the access of Egyptian products to the Russian market. "We discussed the possibility of creating an Egyptian logistics center on the Black Sea coast. We agreed to simplify the access of Egyptian products to our market," Putin said. He added that representatives of adequate Russian agencies would travel to Egypt in the near future for negotiations.
Egypt is ready to increase supplies of agricultural products to Russia by 30 percent, said Vladimir Putin. The Russian president said that Russia and Egypt actively cooperate in the field of agriculture. In particular, Russian grain exports to Egypt amount to 40 percent of Egyptian grain consumption.