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Moscow's Food Import Ban Means Higher Prices For Russians

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Moscow's Food Import Ban Means Higher Prices For Russians

Europe

Moscow's Food Import Ban Means Higher Prices For Russians

Moscow's Food Import Ban Means Higher Prices For Russians

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Russia's response to Western sanctions designed to punish it for its aggression in Ukraine has been a ban on food imports from the U.S. and others. In Greece, farmers are suffering under Russia's ban.

STEVE INSKEEP, HOST:

Now, President Obama also spoke about Russia last night. He noted U.S. leadership in pressing Western nations to impose sanctions on Russia for its involvement in Ukraine. Just over a month ago, Russia retaliated for those sanctions - it banned imports of many food products, including meat, fish, and dairy from Western countries. This is costing the West and also costing Russia, driving up prices for many types of food. In a moment we'll hear about the effects on one European country - Greece. We begin with this report from NPR's Corey Flintoff in Moscow.

COREY FLINTOFF, BYLINE: Shoppers outside this high-end grocery store in central Moscow don't seem too concerned about missing their favorite foods. Timur Vakhitov comes out of the store with a small bag of groceries.

TIMUR VAKHITOV: It shouldn't be a tragedy as many people perceive it. Some people say that all the shops will be completely empty. It's not true and I think that these products, they will last for half a year or so.

FLINTOFF: Vakhitov says that the food ban may also be good for the country because it may stimulate domestic food production. Other shoppers say they've begun to substitute Russian-made products for the foreign goods they used to buy, such as Russian-made cottage cheese in place of cheese from the Baltic countries. But analysts say the food ban will mean substantially higher prices for consumers, even if they stick with homegrown products. This is economist Natalia Shagaida.

NATALIA SHAGAIDA: (Through translator) Prices will probably rise by at least 10 percent and I expect it'll be more for some products. Prices will keep going up as long as we keep buying the goods.

FLINTOFF: Speaking on the independent TV channel, Rain, she says the reason Russian consumers were buying imported products in the first place is that they were cheaper or better quality. Russian officials say that some of the banned products will be replaced by goods from other countries. Consumers could see beef from Brazil instead of Australia for instance. But Shagaida says that there are reasons why Russia imported so much food from the countries that are now banned.

SHAGAIDA: (Through translator) If products from those other countries were of good quality and cheaper, they would've been in our markets already.

FLINTOFF: So far price hikes have been moderate in big cities like Moscow, but they shot up in more remote regions. A prominent business newspaper reported that meat prices were up 26 percent in parts of the Russian Far East. As the ban stretches into winter, that could become a source of real consumer discontent. Corey Flintoff, NPR News, Moscow.

JOANNA KAKISSIS, BYLINE: And I'm Joanna Kakissis in Athens. Christos Yiannakakis has already seen a summer of discontent. He leads Greece's largest, regional organization of growers and cooperatives and last month when Russia began enforcing the food import ban he was flooded with calls from panicked peach farmers. Russia had refused entry to 300 trucks carrying tons of Greek peaches.

CHRISTOS YIANNAKAKIS: (Through translator) Even the day before the ban, the Russians had promised us that there would be an exception for Greek products because of the strong relationship between our two countries, but unfortunately for Greece there was no such exception.

KAKISSIS: Russia is the country's largest trading partner outside the European Union and it's the major market for Greek produce - including 60 percent of peach exports. But while the ban will cause short-term damage to the agricultural sector it likely won't have lasting effects on Greek-Russian relations, says Theodore Tsiakiris of the Hellenic Foundation for European and Foreign Policy.

THEODORE TSIAKIRIS: We'll have this discussion again in about a year from now. I don't think that they will be such a big deal. Probably the ban is going to be listed and then we're going to go back to some sort of business as usual.

KAKISSIS: Perhaps, but Yiannakakis doesn't think so. The European Union has partially compensated Greek farmers for their losses in peaches and nectarines - losses which could exceed $100 million. But now farmers are expecting another hit - when Kiwis ripen next month. Seventy percent were set to go to Russia, Yiannakakis says.

YIANNAKAKIS: (Through translator) The Russian market has turned out to be an unreliable one. It can close just like that. So we have to make it less important and sell our products to others so we're not left in limbo.

KAKISSIS: He's already thinking of how to sell Greek fruit to Turkey, a historic enemy. These days it seems far more reliable than a historic friend. For NPR News, I'm Joanna Kakissis in Athens.

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