World meat industry news

The introduction of sanctions against the Moscow Exchange by the United States and Great Britain may temporarily complicate foreign trade in agricultural products and food - both export and import, experts in the Russian agricultural market believe.

As reported, on Wednesday OFAC (Office of Foreign Assets Control, a division of the US Treasury Department responsible for enforcement in the field of sanctions) added the Moscow Exchange, the National Clearing Center (NCC) and the National Settlement Depository (NSD) to the sanctions list. The UK joined the sanctions on Thursday.

As stated in the commentary of the Union of Grain Exporters posted on its Telegram channel, the sanctions call into question the supply of Russian food for dollars and euros.

At the same time, the union notes that the infrastructure for export sales in rubles has already been created.

“Russian exporters confirm their commitment to international humanitarian principles and their readiness to remain a reliable supplier of grain and other food to our partners,” the message emphasizes.

As market expert Alexander Korbut told Interfax, there may be complications in trade, since established financing channels are becoming more complicated. “Moreover, they can lead to both a decrease in exports, which is not good, and imports, which is also not good, because this will create additional inflationary risks,” he said.

“The option of selling foreign currency earnings or purchasing currency through the exchange has disappeared. Now this is possible on the less transparent over-the-counter market, although it accounts for about 60% of all settlements. The question is how the regulator will regulate all these processes,” he said.

According to him, “the current situation is, in a sense, a repetition of the situation when the first sanctions were introduced, when there were bans on currency payments.” “We’ll adapt after a while,” he is confident.

Moreover, according to Korbut, this situation will “automatically stimulate the transition to payments in rubles.” “They are happening now. But they can be carried out well by those countries that have a large volume of foreign trade turnover with us - China, India, Iran. A significant part of trade with them is already carried out in national currencies. Of course, the countries of Latin America and Africa can join this and Southeast Asia. But the question is what changes they will need to make to the current system for this,” he said.

According to him, the project on digital settlements in BRICS provides good opportunities, but this takes time. “There is also the experience of Iran, which I think we have studied well,” he noted.

As stated by the General Director of the Institute for Agricultural Market Studies (IKAR) Dmitry Rylko, the situation is still uncertain. “Participants in foreign trade activities suspended currency conversion in anticipation of clarification, and the spread increased sharply,” he said.