Experts: the Russian embargo on Ukrainian goods will not lead to significant consequences

Experts: the Russian embargo on Ukrainian goods will not lead to significant consequences

MOSCOW, December 3. Ban on the import of food products from Ukraine to Russia, which is introduced by the government of the Russian Federation from 1 January 2016, will not lead to significant consequences for the two countries. This is stated in the new review, experts of the Gaidar Institute “Operational monitoring of the economic situation in Russia. Trends and challenges for socio-economic development”.

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The role of Ukraine as an importer of Russia as insignificant in terms of total volume of food imports (its share now amounts to 1.2%) and in separate groups, the document says. Ukraine’s share in Russian import in 2012 was 5%. The decline of the role of that country began before the events of 2014. “To a large extent this situation was connected with the activity of the Rosselkhoznadzor and Rospotrebnadzor, its many claims to Ukrainian products, which resulted in trade relations between countries have become opaque and poorly predictable”, – experts say.

The document States that after the introduction of Russia’s embargo on food against a number of countries, among which Ukraine was not included, the reduction of import from that country still continued in absolute terms and relative to other countries. So, in 2015, imports decreased to $235 million, or 6.2 times compared to 2012.

Up 2012 7 product groups from 24 Ukraine’s share exceeded 10%. “Ukrainian businessmen are delivered to Russia even such products that are not produced in their country. So, imported more than 32% of imported to Russia cocoa and its processed products”, – experts say. In 2015 were only 6 groups of products for which its share was less than 2% of total imports.

“As a result of losses from new restrictions on the import of Ukrainian goods in Russia will be hardly noticeable,” – experts say.

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A comparison of the rate of decline of Ukrainian export of food products in General, and in Russia, shows that this country has already shifted to other markets, the document says. Refusal of Russia of products from Ukraine will bring problems only to suppliers of specific product groups, not for the Ukrainian economy in General, analysts believe.

The fact that Ukraine has found new markets and reduces the production of products that previously were imported to Russia, specifies the fact that an increasing share of meat in the product structure of Ukraine’s exports. In 2012 it was 1.8%, in 2015 – 2.7 per cent. Total volume in the valuation increased from 2012 by 2015 by 30%. However, exports of this product to Russia in 2015 decreased over the same period by almost half.

“The announcement about distribution of the Russian embargo on Ukraine is rather informational in nature. The reduction of import volumes, the disappearance of the relatively cheap Ukrainian products to the Russian consumer has already happened earlier, so now it is unlikely that anything will seriously feel on the background of General rise in price of products and reducing volumes of their purchases” – experts say.