As Russian sanctions could affect Europe
Russian retaliatory sanctions have caused a lot of debate and discussion, including in Europe. Restrictions apply a fairly narrow range of products, but the producers themselves say about the damage to business.
And the impact varies from country to country, so it is not surprising that the estimate of overall loss is not so simple.
As the sanctions will affect Europe?
The general situation with the volume of agricultural exports to Russia is clear. Total agricultural products accounted for 7% of EU exports, and of this amount, 10% comes from Russia.
This means that the share of agricultural exports in Russia is only 0.7% of the total.
But it is important to remember that this figure by itself does not reflect the impact on the economies of individual countries, so it can not be limited.
With regard to specific countries, the terms of trade with Russia, depending on GDP, exactly hurt the Baltic countries (Latvia, Lithuania and Estonia), as well as the losses will face Poland, the Netherlands, Germany and Denmark.
As sanctions affect Russia?
Most likely, for Russian consumers sanctions will translate into higher prices and a reduction in consumer choice.
Russian imports of agricultural products in the amount of about 1.2% of GDP per year, and it’s not much compared to other imported items such as, for example, machinery and equipment.
Russia is traditionally strong in the export of mineral resources and almost self-sufficient in agriculture, but a variety of chemical raw materials and machinery to be imported.
Nevertheless, agricultural production accounts for 13.3% of total imports. This volume is not so easy to replace, but Russia has several options.
Expand domestic production.
Given the natural resources and land at the disposal of Russia, as well as the resources of the state, it is quite possible.
From the standpoint of food security, Russia has been working in this direction.
Expand production with Eurasian counterparts.
As part of the current response to the crisis Russia strengthens ties with neighboring countries and in particular with countries in the Eurasian Union.
Some of these countries have significant agricultural sectors, although unlikely to increase supply to the volumes that are needed in Russia.
Search for partners abroad.
News that Russia is planning to conclude a number of deals with Latin America, abound. In this case Russia will likely also find support in China.
It is obvious that such actions have a negative impact on efforts to improve food security, but it will help to limit the negative economic impact.
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