Russia Extends Import Ban on the US, Australia, Canada, Ukraine, and the EU

Published 2021년 9월 30일

The ban on dairy products, meat, fruit, and vegetable imports, introduced in 2014, will be extended until December 2022. Currently, Russia is the 6th largest beef importer and a leading fruit and vegetable importer. The trade embargo could improve Russia's self-sufficiency and lessen the country's dependence on imported goods. The import ban contributes to the formation of monopolies and causes a surge in the prices of Russian goods.

The extension of the embargo on foods from the US, and the EU, comes in retaliation to several nation's sanctions on Russia. The import ban was introduced in August 2014, in response to punitive measures placed by Western states following Russia’s annexation of Crimea and backing separatists in eastern Ukraine. Along with the EU and the US, the import ban affects Canada, Australia, and Ukraine.

Trade impact

The beef exporter most affected by the August 2014 embargo was the EU, which shipped about 54K metric tons of beef and beef offal to Russia during the initial seven months of that year, reaching USD 161 million. In 2015, EU beef exports plunged by more than 95%, reaching only 2,840 metric tons valued at USD 4.7 million, as Russia had been the EU’s leading beef market.

Trade embargo leads to a growing black market

Despite the embargo, many western products still find their way to Russia, such as cheese from Italy and France, which is in high demand in Moscow. These black-market activities have led to Russian authorities confiscating and destroying tons of food in the past. To evade the ban, products may be repackaged in neighboring countries to conceal their origin, vehicles traveling through Russia may secretly offload cargo, and imported goods can be documented as something else.

Russia aims for self-sufficiency

The embargo could boost the country’s self-sufficiency in key sectors such as meat and dairy. Russia also seeks to reduce dependence on imported goods. Russia has focused on improving its poultry and pork industries, and significant investments have been channeled towards building a modern beef industry built around top-tier genetics and grain feeding. The country’s local beef producers have benefited from the import ban, especially in the high-end restaurant sector where competition from imports has significantly decreased. But for Russia’s beef industry to achieve sustained success, it will need to become more competitive in the domestic and international markets. Meat imports have decreased since 2014. Between 2016 and 2020, Russia’s meat imports have decreased by -11% in quantity and -8% in value. The country’s meat exports have improved significantly during the period, rising by 51% in value from 2016 to 2020.

Russian consumers, meanwhile, complain of high prices and the poor quality of products made in their country. Analysts say the import ban is contributing to the formation of monopolies and causing a surge in the prices of Russian goods.