Russia’s import ban in response to sanctions from the U.S. and Europe over the war in Ukraine will hurt companies that ship a variety of agriculture products, according to officials.
In calendar year 2013, the United States shipped $1.3 billion of agricultural and related food products (including fish and forestry products), and of this amount, approximately 55 percent are now restricted products, according to a U.S. Department of Agriculture analysis published on Friday.
“Russia is the fifth-largest agricultural import market in the world after the EU, China, the United States and Japan, with total imports of agricultural and related products in 2013 of $40.4 billion. Russia was the 20th-largest market for U.S. agricultural and related product exports in 2013, with exports worth $1.3 billion, accounting for less than 1 percent of total U.S. agricultural exports. Exports in the first half of 2014 were $606 million, up 4 percent from the same period last year," said USDA.
The leading agriculture products affected by the ban and the value of the product shipped from the U.S. to Russia in 2013 are as follows:
- Poultry meat and products, $310.2 million.
- Tree nuts, $171.6 million.
- Prepared food, $83.5 million.
- Fish products $83 million.
- Fresh fruit, $34.2 million.
- Pork and related products, $17.6 million.
- Processed fruit, $16.2 million.
- Fresh vegetables, $1.1 million.
- Beef and related products, $1 million.
The USDA said Russia was the fourth-largest market for U.S. poultry.
The USA Poultry and Egg Export Council said about 276,000 tons of the 3.3 million tons of poultry exported last year went to Russia. The U.S. has been Russia’s preferred source of chicken. Toby Moore of the council notes that the Russians have a global quota of 250,000 tons of poultry, and the U.S. actually exceeded that quota last year.
“It’s going to be more than just a hiccup,” he said, but added that the import ban should not hurt the U.S. poultry industry that much from a financial standpoint because of tight supply domestically and high beef and pork prices. But he said individual cold storage companies or shipping companies could be affected.
Poultry used to move in large quantities in breakbulk reefer ships from ports such as Gulfport in New Orleans and Pascagoula, but increasingly poultry is moved in refrigerated containers from ports such as Savannah, Charleston and other ports on the East Coast.
Curtis Foltz, executive director of the Georgia Ports Authority, said, "We are monitoring the trade embargo to Russia very closely. The primary export agriculture commodities that move through our ports to Russia are poultry and peanuts — very important markets for the State of Georgia. The sanctions have just been announced, and our customers are evaluating the impacts to Russia and any opportunities in alternative markets"
On Friday, Maersk Line said agricultural and food commodities from the EU, Norway, U.S., Canada and Australia affected by the ban will be refused discharge in Russian ports.
"At this time, Maersk Line is unable to accept existing bookings or new bookings of banned commodities to Russia. All cargo received for shipment at USA or Canadian ports must be rebooked/redirected to non-sanctioned ports," it said. "Similarly, in instances where banned cargo is presently on the water to Russia, it must either be redirected to other non-scanctioned ports or returned to origin. All resulting costs will be for the shipper’s account, including local costs and freight, as per the terms of the contract of carriage."