Sanctions are taking their toll on Russia.\u00a0 When Russia announced counter-sanctions against the European Union, USA, Canada and Australia banning imports of food items from those countries, it was clear there would be imminent consequences. But just how those are playing out isn\u2019t as some had expected.<\/p>\n
Gennadi Kaakevitch writes: Russia imports 39% of food.\u00a0 The immediate result of restrictions on imports should be a considerable increase in prices. It is incorrect to suggest, like various commentators in Russia do, that price increases should only affect luxury imported foods, such as exclusive sorts of French cheese and Spanish ham. They have argued locally produced basic items, such as meat and milk, would not be affected and, therefore, ordinary people consuming ordinary food should not feel the impact.<\/p>\n
On the contrary, shoppers facing increases in prices for imported products inevitably switch to domestically supplied alternatives. This results in the price of domestic alternatives being pushed up.\u00a0 Ordinary people in Russia think that banning imports will help local farmers and the food industry to develop domestic production and keep prices down. But to what extent is the substitution of imports with increasing local produce possible?<\/p>\n
Is it possible for Russia to replace imports from the countries subjected to counter-sanctions with products from other countries? Meat can be sourced from Brazil and Argentina, but South American exporters have already increased their prices for Russia, blaming sanctions.<\/p>\n
Prices for food items jumped by 30-40% in August alone.<\/p>\n
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