September 22, 2014
Gov’t seeks to export more food to Russia
Delegation headed by Industry and Agriculture ministers travels today to Moscow
The federal government will today send a trade delegation to Russia to try to increase exports to the country, which this month banned many Western products in response to sanctions over its intervention in Ukraine.
Among those who will take part in the mission are Industry Minister Débora Giorgi, Agriculture Minister Carlos Casamiquela and International Economic Relations Secretary to the Foreign Minister Carlos Bianco. They will reportedly meet with the head of Russia’s Federal Service for Veterinary and Health Surveillance, Sergey Dankvert, who accompanied President Vladimir Putin on his recent visit to Buenos Aires.
Russia announced last week a one-year embargo on meat, fish, dairy, fruit and vegetables from the United States, the European Union (EU), Canada, Australia and Norway in retaliation for Western economic sanctions over Moscow’s actions in Ukraine.
Argentina’s enthusiasm for trade with Russia will improve Moscow's chances of filling any gaps left by its ban on EU supplies and reduce the odds of food shortages. Brazil has already jumped in with both feet. About 90 new meat plants there were hastily approved to export to Russia, and Brazil began work to increase its corn and soybeans sales to Russian buyers.
“It’s important to highlight the great opportunity the Russian market represents for Argentina after the decree signed by Russia’s president that forbids for one year imports from the United States, European Union, Canada, Australia and the Netherlands,” the Foreign Ministry said yesterday in a press release.
Meetings are scheduled to take place on Tuesday and Wednesday in Moscow, “with the explicit objective of quickly signing export contracts. Dairy product exports alone could rise 20 percent if Russia turns to Argentina after blocking US and EU milk,” Miguel Paulon, head of Argentina's dairy industry chamber, said.
At the same time, Daniel Funes de Rioja, head of the Argentine COPAL food industry chamber described the scenario as a “concrete opportunity” the country “should take advantage of” and anticipated next month a delegation of Argentine businessmen will travel to Moscú, where a fair of food producers will take place.
“This is a very interesting perspective, considering the complex year we are going through in the domestic and the international market. We think it will have an effect on the last quarter of the year and in 2015,” Funes de Rioja said.
In the first five months of the year, Argentina exported US$297 million to the world’s fifth largest economy, while imports totalled US$605 million. Balancing out the deficit was reportedly on the agenda during Putin’s recent encounter with President Cristina Fernández de Kirchner in Buenos Aires.
The subjects of the trade talks in Moscow will include beef and “some soymeal,” said a Buenos Aires trading company executive who requested anonymity. Argentina is the world’s number one exporter of soymeal livestock feed. The country limits exports of meat, corn, wheat and other foods to try to keep domestic food prices down.
Increasing export revenues could also help Argentina stabilize its Central Bank foreign reserves, which have fallen more than five percent over the last year to US$28.968 billion.
“To Russia we could export beef, grains and fruit, but our government makes international shipments difficult by not always granting export permits,” said Ernesto Ambrosetti, chief analyst at the Argentine Rural Society, which represents some of the country’s biggest farms.
“So it’s hard to really know what we could export to Russia to take advantage of a short-term opportunity,” he added.
The trade mission comes at a time of strain between Washington and Buenos Aires. Argentina blames the US federal courts for pushing it into a sovereign bond default last month, part of a long battle with a group of New York hedge funds.
Herald with Reuters, Télam