ZPP Newsletter
Warsaw, August 13th, 2018
The Russian embargo does not work –we have alternative consumer markets.
Food exports are on the rise
The Polish trade balance after the introduction of the Russian embargo is systematically improving. The structure of exports has not changed; however, the volume of food products exported has increased. Poles were, therefore, successful in effectively finding alternative consumer markets.
The basic conclusion from the document published by the Union of Entrepreneurs and Employers ZPP is as follows: Polish exporters are doing very well and in spite of the embargo, they are gradually increasing the volume of exports, seeking new markets. What is important, the export of food products was not particularly affected by the embargo. It seems, however, that the main victims of the whole situation are primarily the Russians.
“Immediately after the embargo was introduced, we were being scared how terrible the consequences would be for Polish producers, in particular farmers were to await a catastrophe,” says ZPP President Cezary Kaźmierczak. “Meanwhile, it turned out that Russia is not an indispensable market for our exporters, and the embargo hits the Russians themselves, who now have to pay much more for food than before 2014.”
The fact that the embargo had no significant negative impact on the volume of Polish exports is best evidenced by hard data – in 2013, we exported goods worth approximately PLN 648 billion. In 2016, two years after the embargo was introduced, the value of exports increased to PLN 803 billion, that is circa 32% more compared to 2013. At the same time, the structure of exports did not significantly change, which means that the volume of sales abroad of Polish food products also increased.
“This clearly shows that the embargo did not lead to the collapse of Polish food exports. It also turns out that Russia is not at all a key market for Polish exporters, already in 2013 we were selling more to our small neighbour – the Czech Republic – than we were to Russia,” says Jakub Bińkowski, Secretary of the Department of Law and Legislation of the Union of Entrepreneurs and Employers ZPP.
Despite the fact that Poles managed to cope with the constraint introduced in 2014, or the fact that Russians complain about rising food prices, Vladimir Putin claims that he will keep the embargo in force for as long as possible. It seems that there are no rational premises for this – even the condition of the Russian food sector, which could theoretically be improved if the embargo were abolished, does not justify maintaining the embargo because of its increased share in satisfying internal food demand. A significant improvement can only be noted in the poultry and pork sector.
Finally, it seems that Russia, due to the instability of its economic situation, largely dependent on prices on the raw materials market, as well as the relative poverty of the majority of the population (especially in the oblasts far from Moscow), is not a very attractive market, therefore possible maintaining of the embargo should not pose any serious threat to Polish producers. Henceforth, the argument that the embargo was an exceptionally severe repercussion resulting from political and economic sanctions imposed by Russia, that should be eased – according to some – must be regarded as false.
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Business Papers is a new format of documents prepared by the Union of Entrepreneurs and Employers ZPP – it consists in a synthetic presentation of the most important facts and data concerning the issue discussed, in a graphically attractive form. Thus, the readers can quickly learn key figures, statistics, and news on the subject of their interest.
13th August 2018 Russian embargo vs. Polish exports (in Polish)
fot. Tim Mossholder / Unsplash
