World meat industry news

The Russian Government has approved on Monday a list of foreign states and territories that are deemed to have committed unfriendly actions against Russia, its companies, and citizens.

The list includes the United States and Canada, all of the European Union states, the United Kingdom, (including Jersey, Anguilla, the British Virgin Islands, Gibraltar), Ukraine, Montenegro, Switzerland, Albania, Andorra, Iceland, Liechtenstein, Monaco, Norway, San Marino, and North Macedonia. In Asia, the list includes Japan, South Korea, Australia, Micronesia, New Zealand, Singapore, and Taiwan (considered a territory of China, but ruled by its own administration since 1949).

There are new Asian trade implications with Singapore and South Korea especially. South Korea had been negotiating a Free Trade Agreement with the Eurasian Economic Union (EAEU) and that will presumably be put on hold. Singapore has signed an FTA with the EAEU yet finishing touches are still being worked, presumably these also will be put on hold. That leaves Vietnam as the only Asian country to have a Free Trade Agreement with Russia.

The Russian government has stated that according to this decree, Russian citizens and companies, the state itself, its regions and municipalities that have foreign exchange obligations to foreign creditors from the list of unfriendly countries will now be obliged to pay them in rubles rather than in other currencies. That achieves two things; it saves Russia’s foreign reserves, and it forces these countries to accept payment in a massively devalued currency that is currently hard to trade – no-one currently wants to accumulate Russian rubles. It should be noted though that this is not aimed at smaller businesses but only applies to payments exceeding 10 million rubles (US$72,202) per month. This also applies to foreign bond holders, even for amounts denominated in foreign currencies, and could lead Russia into default on US dollar denominated debt. The country has about US$700 milion of Government debt repayments to make during March, debtors will now be receiving rubles.