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Russia poised to lift Turkey food ban, 13.09.16

Russia may lift its food embargo on Turkey, due to be in place until the end of 2016, according to the Russian Minister of Economic Development Alexey Ulyukaev.

Similar statements have previously been made by top officials from the Turkish government, suggesting that an agreement has been reached between Russia’s president Vladimir Putin and Turkey’s president Tayyip Erdogan.

We only need to ensure that Turkish agricultural goods match the [quality] standards that make these deliveries possible,” Ulyukaev suggested.

According to estimates from Russia’s Ministry of Economic Development, the overall losses to Turkey as a result of the food embargo during the first five months of 2016 reached $380.9m, including $25m-worth of poultry meat.

A report from the Ministry suggested the food embargo against Turkey, entered into at the end of 2015 due to an incident with a Russian SU-24M bomber, contributed to a reduction in overall imports of products from the sanctioned list to Russia, as they decreased 8.2% in value by US$ between January and May compared to the same period last year.

Rising quickly

Turkey saw a strong rise in meat exports to Russia amid sanctions against the EU, the US and Canada, as overall deliveries of poultry meat to Russia jumped 10 times in the second half of 2014 versus the same period the previous year, according to information from Russian ambassador in Turkey Andrey Karlov. During this period the overall volume of deliveries reached 8,000 tonnes (t).

Over the 10 months of 2015, Turkey significantly increased deliveries of poultry to Russia, supplying 20,700t with an overall value of US$15m, compared to 9,400t and US$14.4m in the same prior period.

For a long time Turkey has been seeking the right to supply poultry to the Russian market and took advantage of the moment, appearing there in the wake of the food embargo, when shipments from the US and Europe were banned,” explained Dmitry Rylko, director general of the Institute for Agricultural Market Studies.

Poultry imports down

However, according to Albert Davleev, president of consulting firm Agrifood Strategies, prior to the embargo, deliveries of poultry meat from Turkey had been pretty poor, even given strong growth in 2015. According to him, with the overall quota of poultry imports set at 364,000t, supplies from Turkey accounted for less than 8% of the overall volumes.

According to Eugene Gerden, Russian agricultural analyst, several years ago Turkey claimed it could export up to 500,000t of poultry meat to Russia, but this seems impossible now, since overall poultry imports to the country have fallen significantly. According to official information, in the first half of 2016, Russia imported 93,700t of poultry, 8.5% less than in the first half of 2015.

By value, supplies dropped even more significantly – by 22.5% on year-to-year to US$12.5m.

Given the continuing rise in production capacity [in Russia], imports from Turkey simply don’t have space to get into Russian market, so they would be really lucky to restore the level of supply they had prior to the embargo,” said Gerden.

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