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News 08 Aug 14

Serbia Eyes Windfall From Russia’s EU Food Ban

Russia’s decision to impose a ban on the imports of food products from the EU has created an opportunity for Serbia to improve its position on the Russian market, experts say.

Gordana Andric
BIRN
Belgrade

Experts in Serbia say Russia’s new embargo on EU food imports creates an opportunity for the Serbia to increase sales to the Russian market.

“Cruel as it may sound, there is no sympathy on the trading market. This is a big chance for Serbia, the best we had in 14 years,” Milan Prostran, an economic expert, told BIRN.

President Vladimir Putin announced a "full embargo" on food imports from the EU, US and some other Western countries in response to sanctions over Ukraine, on August 7.

Prostran said Serbia did not have enough goods to export to make a giant step forward in the Russian market, but this was still a chance to find new customers.

“We obviously cannot compensate for lost imports from the West, but, as we won’t have competition from the EU, we can find our place. This is a battle for position on the market,” Prostran said.

Serbia should use the opportunity to increase production of food for export, he added. “We must use this time to organise and invest in production,” he advised.

Serbian Chamber of Commerce data show that Serbian food exports to Russia in 2014 rose by 68 per cent compared to the previous year.

They were worth $117 million in the first six months of 2014, well up on the figures for 2013, when food exports to Russia were worth $185 million for the entire year.

Serbian exports made up only a small fraction of Russia's total foreign food needs, however. In 2013, Russia imported about $42 billion worth food and agricultural products. 

Experts believe Serbia has a chance to increase exports of fruit, vegetables, meat products, dairy products and alcoholic beverages.

However, Zeljko Sertic, president of the Chamber of Commerce, warned of the strict conditions that Russia applies to food imports.

“The Russian market is not the same as it was. It is now more complex, the requirements are much more specific, and control inspection regulations are stricter,” Sertic said.

In 2013, Russia was Serbia's fourth-largest importer of goods from Serbia, behind Italy, Germany and Bosnia.

Under a free trade deal that Serbia and Russia signed in August 2000, goods produced in Serbia are subject to a 1-per-cent tarriff.

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