Vladimir Putin’s announced one-year ban on food and agricultural imports from countries that imposed sanctions on Russia has the potential to cost Denmark billions of kroner.
Putin on Wednesday imposed one-year bans and limits on food and agricultural imports from nations that have imposed sanctions on Russia over its aggression toward Ukraine.
The impact on Denmark could be significant. In 2013, Denmark’s total exports to Russia accounted for 12 billion kroner ($2.2 billion). That corresponds to two percent of Denmark’s total exports and makes Russia Denmark’s 13th largest market.
Among Denmark’s most important export areas to Russia is the food sector, which accounted for 5.76 billion kroner in 2013, counting agricultural technology.
According to the Kremlin, food products will be directly targeted by the ban. The Kremlin’s statement said that Putin's executive decree "either bans or limits… the import into the Russian Federation of certain kinds of agricultural products, raw materials and food originating from countries that have decided to adopt economic sanctions against Russian entities and (or) individuals."
Russia will reportedly publish a full list of banned products by Thursday evening but sources have reported that the list will include all fruits and vegetables produced in the 28 EU nations. According to Reuters, Russian PM Dmitry Medvedev said meat, fish and dairy would also be banned. If that is the case, the impact on Denmark could be much more severe.
According to figures from the Danish Agriculture and Food Council (Landbrug & Fødevarer), fruits and vegetables only account for a small percentage of Denmark’s agricultural exports to Russia. The biggest export by far is pork, which accounted for half of the total 4.3 billion kroner food export total to Russia in 2013. Fruits, nuts and vegetables only accounted for a combined seven million kroner. Dairy products however accounted for 686 million kroner, while Denmark exported 284 million kroner worth of fish to Russia and beef products totaled 178 million.
Landbrug & Fødevarer said that it was worried about “the potentially serious situation” created by Russia’s announced ban and is eagerly awaiting the final list of banned products.
“It will be very serious, also for the Danish food sector, if Russia forbids or limits the import of agricultural products. For now, we are awaiting a concrete list showing which nations and which products will be covered by the ban,” Landbrug & Fødevarer’s administrative director, Søren Gade, said in a statement.
Danske Bank analyst Steen Bocian agreed that it was hard to predict the impact on Denmark until the final list is produced but said that it might not be as bad for Denmark as it looks.
“Many of the items that can’t be sold on the Russian market will be sold in other markets,” he told Ritzau.