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Russian President Putin has ordered restrictions on food and agricultural imports from countries that have sanctioned Russia. (Ian Willms/Report on Business magazine)
Russian President Putin has ordered restrictions on food and agricultural imports from countries that have sanctioned Russia. (Ian Willms/Report on Business magazine)

Canadian pork producers brace for hit from Russian retaliation Add to ...

Canada’s pork industry is bracing for a major blow after Russian President Vladimir Putin announced his country will ban the import of agricultural products from countries that have imposed sanctions on Russia.

The announcement Wednesday did not list specific products that will be covered by the ban, but Russian media reports said a list is expected by Thursday and would likely include meat and dairy products.

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Pork products – including frozen pork, ham, pig fat and offal – are Canada’s largest agricultural export to Russia, accounting for 86 per cent of the total $563-million in agri-food exports to Russia in 2012, according to Statistics Canada data. Any ban on pork imports would be a serious blow for Canada, which has imposed sanctions on Russia in recent months to protest its annexation of the Crimea region.

Canada Pork International, an industry association promoting Canadian pork exports abroad, said Russia has become Canada’s third largest export market for pork after the United States and Japan, accounting for $492-million of sales in 2012.

Jacques Pomerleau, president of Canada Pork International, said the industry is waiting to see whether and how pork is affected.

“We do have concerns, that’s for sure, but the impact is not known yet, because Russia has not formally announced their list of sanctions,” Mr. Pomerleau said Wednesday.

He said Russia imports pork for processing and packaging in that country, so Russia may be strategic in applying the ban so that it does not damage its processing industry or harm consumers.

Russia is a particularly important buyer of certain Canadian pork products, such as trimmings used for manufacturing sausages, so the impact of sanctions in Canada could vary depending on which products are affected, Mr. Pomerleau said.

Gary Stordy, spokesman for the Canadian Pork Council, which represents Canada’s pork producers, said the potential impact is difficult to assess without knowing details about the ban.

“There are a number of scenarios going from total shutoff to no shutoff, and that’s the complication we have right now,” he said.

He said Canadian pork producers have worked to accommodate sales to Russia, meeting inspection criteria, including reciprocal certification standards, and allowing Russian inspectors to inspect Canadian processing plants.

“We believe the Canadian industry has gone to great lengths to provide specific pork products that have been requested by the Russian market, and any disruption in trade would have an impact on our industry,” Mr. Stordy said.

Canada is among the western countries that have joined the United States and the European Union in imposing sanctions on Russia to protest its actions in Ukraine. Prime Minister Stephen Harper unveiled new measures Wednesday, announcing economic sanctions against Russian banks and additional travel bans against senior Russian officials.

Mr. Harper also said Canada will enact export restrictions on technology used in the oil exploration and extraction industry, which will be implemented “in parallel with our allies.”

Russia’s retaliatory agricultural sanctions could prove a setback to Canada’s recent efforts to improve exports of pork and beef to Russia. Agriculture Minister Gerry Ritz travelled to Russia last year to drum up sales, but the trip came before Russia’s actions in Ukraine.

Media reports Wednesday suggested several possible scenarios for how Russia’s new sanctions could work.

Russia’s RIA Novosti news agency reported the country would ban all U.S. agricultural products, including poultry, and ban all fruit and vegetables from the European Union, but provided no details about sanctions to be imposed on other countries such as Canada and Japan.

Other reports suggested the ban may not be too broad because the decree issued by Mr. Putin specified only that “certain types” of agricultural produce and food would be affected, and said the government would guard against quick price hikes caused by import shortages.

Russian media reports said officials are consulting with other countries such as Brazil, Chile, Argentina and Turkey about expanding imports from those countries to replace products lost by its bans.

Follow on Twitter: @JMcFarlandGlobe

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