Russia banned meat, fish, dairy, fruit and vegetables imports from
the United States, the European Union's 28 member states, non-EU
member Norway, Canada, and Australia on Thursday in retaliation
against sanctions over the Ukraine crisis.
Agriculture Minister Nikolai Fyodorov has acknowledged the ban would
cause a short-term spike in inflation, but said he saw no danger in
the medium or long term as Russia started to look elsewhere for
The ministry, referring to a meeting with food sector unions, said:
"Participants at the meeting discussed the possibility of signing
with producers and agricultural products processors an agreement on
... price policy, to prevent any speculative rises in prices for
Russia has developed its own food industry over the past 20 years
which consists of both home-grown firms such as Cherkizovo and Ros
Agro and local units of foreign companies, including Pepsico and
According to the International Trade Centre, a joint venture between
the United Nations and World Trade Organization, Russia imported
$17.2 billion of food from the countries targeted by the ban, of
which $9.2 billion was in the affected categories.
"While more imports from elsewhere may partly offset the supply
shortage, Russian food prices will continue to creep higher," BNP
Paribas said, noting that the ban would add 1.8 percentage points to
Russia's consumer price index over 2014-15.
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The prospect of higher inflation could weigh on retail sector shares
- including Magnit, X5 Retail Group, Lenta, Dixy and O'Key -
"It will be difficult to pass cost inflation on to the consumer
immediately, so we expect some pressure on margins over the short
run," VTB Capital consumer analyst Maria Kolbina said.
(Reporting by Polina Devitt and Maria Kiselyova; Editing by Louise
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