Limitation of Ukrainian supplies: re-export scheme will no longer work?

October 27, 2014 20:14

Despite all diplomatic efforts, Russian and European authorities so far failed to reach a consensus and put an end to the political issues being discussed in the international arena for several months. Bilateral "crackdown" continues, as evidenced by the recent ruling of Federal Service for Veterinary and Phytosanitary Surveillance of Russia.

Recently the department announced a temporary restriction of supply of fruit and vegetables from the Ukraine. This was preceded by a sharp increase in imports and transit of plant products. In particular, in August and September a substantial growth in the supply of unmarked tomatoes, cucumbers, pears, apples and plums was recorded, compared with the same period last year. More than 115 thousand tons of vegetables and 19 tons of fruit on the $ 85 million and 23 million respectively were imported from the Ukraine in 2013. Based on the data for the whole year, experts have concluded about the possible re-export of goods under sanctions. According to them, forbidden foods from the EU countries can be transported in such a way.

In accordance with this assumption, Federal Service for Veterinary and Phytosanitary Surveillance of Russia requested Federal Service for Veterinary and Phytosanitary Surveillance of Russia of the Ukraine to report data on the amount of plant products grown in the country this year, and information about agricultural areas. According to the Ukranian officials, no guarantees confirming Ukrainian origin of imported goods could be provided due to strategic character of information requested. Also, they stated that supplies destined for our country will be redirected to the Ukranian domestic market, to meet the needs of the army and the eastern regions.

It is worth noting that Russia can ban not only shipments of certain foods from the Ukraine. Civil servants are considering imposing restrictions on imports of steel products and, in particular, steel wheels for rolling stock. Eurasian Economic Commission (EEC) analyzed the changes in the volume and value of shipments for the past three years and has already started an anti-dumping investigation.

What other industries have time to affect the political tension before the conflict will be eliminated? Keeping abreast!