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    March 20, 2015

    Victory for Import Substitution: Russia begins to export meat to the EU




    3/20/2015


    Translated from Russian by J.Hawk

    ZAO Krasnobor, a Russian agribusiness specializing in turkeys and located in the Tula Region entered the list of exporters to the European Union, according to the Rosselknoznadzor state agency.

    Krasnobor is the first Russian business to receive the permit to export turkey meat to the EU, notes RIA Novosti. Rosselkhoznadzor already announced about two agribusinesses in Belgorod Region that received a permit to export poultry meat (chicken, duck) to the EU. However, the turkey meat will arrive in the EU first.

    Last year, in response to US and EU sanctions, Russia undertook measures aimed at import substitution. Last summer the Russian Federation launched a campaign of food import substitution.

    In the Spring 2015, Hungary, Bulgaria, and several other countries once again demanded that the anti-Russian sanctions be lifted in order to end Russia’s food embargo.

    J.Hawk’s Note: Beef and pork will take a little while longer, but if this trend continues, Russia’s domestic meat production will continue to grow. It’s just that poultry production can be increased almost overnight due to the birds’ rapid growth and comparably short lifespan.

    The ruble devaluation of late last year must be viewed with the above in mind. It’s the fact that the ruble is very weak relative to the Euro that makes Russian exports, and not just of food, highly competitive. The criticism that the Director of the Russian Central Bank Elvira Nabiullina received after the fall of the ruble was entirely off the mark, as it failed to note that no import substitution could take place at the ruble exchange rates of a year ago. Yes, the devaluation did hurt people who got used to imported goods. That’s the reason the Russian “liberal opposition” hates Putin and his team—it’s simply fashionable to be seen consuming imported Western goods of all kinds.

    The process has moved so far that even if the sanctions were lifted tomorrow, EU imports would not return to Russia’s markets, simply because it’s not the sanctions but the value of the ruble that’s keeping them out. Notice that the EU’s own response to its economic crisis was “quantitative easing”, which is a devaluation by another name. Too little, too late…
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