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

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

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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