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Bord Bia Establishes Support Unit To Assist Companies With Russia Situation

Published on Aug 11 2014 2:59 PM

Bord Bia Establishes Support Unit To Assist Companies With Russia Situation

Bord Bia has put in place a dedicated support unit to assist businesses affected by the trade sanctions imposed by Russia last week on EU produce.

Exports of Irish food and drink to Russia were valued at €232 million in 2013, with prepared foods accounting for approximately half of this (€112 million). Pigmeat exports accounted for €59 million, while seafood, dairy and beef were valued at €48 million.

"In the context of recent uncertainty and now the suspension of trade of certain food categories to Russia, exporters will have been reviewing alternative market opportunities," Bord Bia said in a statement. "Bord Bia has established a dedicated support unit to assist companies with regard to the trading situation with Russia, and to help in progressing such opportunities."

Commenting on the situation, Cindy van Rijswick, industry analyst with Rabobank Food & Agribusiness Research and Advisory, said that while total exports to Russia from the EU are "rather small", the sanctions could lead to increased price pressure in the rest of Europe.

"Total exports to Russia are rather small (4%), but the impact on the overall market situation in Europe could be severe," she said in a statement. "Currently there is already severe price pressure on markets for most fresh fruits, vegetables and potatoes in the EU. If the extra supply that normally would be exported to Russia will also be sold on the EU market, price pressure will be even more extreme."

Markets that will be "most affected" are the Netherlands, Poland and Spain, she added. Russia accounts for €2.5 billion worth of exports of fruit, vegetables, potatoes and nuts from Europe.

Van Rijswick also noted that some countries have already "jumped into the market opportunity" created by the sanctions, with "countries such as Serbia and Azerbaijan increasing exports into Russia," a move that could lead to the creation of new long-term arrangements.

One business that has sought to grow its exports to Russia in recent years is the Kerry Group, which said last week that its EMEA markets are achieving "excellent results to-date through increased innovation", in H1 of this year. However, the group's Director of Corporate Affairs, Frank Hayes, told Radio Kerry last week that the sanctions would have a "relatively insignificant" effect on its business.

Talking to RTÉ Radio last week, Minister for Agriculture Simon Coveney said that sanctions were not a “huge surprise”, however, he was concerned that certain dairy products could be targeted. “I think the big worry in Ireland will probably be cheese – last year we exported about €4.5 million worth of cheese to Russia. That would be a real worry for us.”

Nevertheless, the Minister was hopeful that Russian sanctions were “not going to have a big impact on Ireland”.

© 2014 - Checkout Magazine by Stephen Wynne-Jones

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