News Politics
Belarus food import ban also affects Russia
The import restrictions that Belarus plans to introduce in 2022 will affect food exports from a number of European countries, the United Kingdom, the United States and Canada. The friendly Russia is also unintentionally affected. A lot of imported food is destined for re-export to Russia.
According to a rough estimate, the announced sanctions will affect an import package of foodstuffs worth €660 million to €680 million on an annual basis. They are approximate numbers. Gray imports also take place. This mainly concerns dairy, meat and fruit and vegetables. Fish and alcoholic beverages are not affected, as are infant nutrition and the import of food for personal use. As a result, the Belarusians can still go back into the country with a trunk full of food from Poland or Lithuania. At least if the borders remain open.
The Belarusian sanctions, meanwhile, threaten to have an unintended side effect. Belarusian President Alexander Lukashenko states that Belarusian agriculture can easily produce more to compensate for the loss of imports from the European Union, but in practice this is not easy. Producing more milk and meat is still possible, but the product range is in any case narrower, or so it is estimated. Higher quality products in particular are becoming scarcer. The consequences will also be felt in neighboring Russia. There, the retail prices of many foodstuffs are rising and the supply is shrinking.
President Aleksandr Lukashenko promises to compensate for imports from friendly countries, but something like this had only moderate success after 2014 (during the Russian import stop).
The Belarusian government further states that the food embargo does not thwart Belarus' export plans. Food exports are still forecast to be worth more than €5,3 billion for the current year. However, the lion's share of this goes to Russia and Ukraine (with which the relations are also getting worse).
The Belarusian import sanctions are a response to earlier Western sanctions that were imposed after last year's electoral fraud and subsequent harsh measures against its own population. A long list of government officials is no longer welcome in the European Union and the United States, and neither is their money. In addition, a series of Belarusian companies have been affected.
Actions against potash producer Belaruskali
For the agricultural sector, especially the sanctions against Belaruskali, which accounts for 15% to 18% of global potash production. The company exports €2,5 billion worth of potash annually from its mines in Salihorsk, a place halfway between Minsk and the Ukrainian border. The extracted product is then transported by rail to the Lithuanian port of Klaipeda, from where it is shipped around the world.
The first sanctions against Belaruskali were announced by the United States in August. Lithuania was also called upon to participate. This turned out to be a difficult task for the Lithuanian government. On the one hand, support was expressed for the sanctions and it also took part in a European package. Meanwhile, the Lithuanian railways continued to transport potash. That would finally stop in December, but now it appears that Belaruskali has already paid in advance until January, the railways are defending themselves. This month, another million tons of potash will continue to go to Klaipeda.
Given the revenues involved in transporting Belarusian potash, it is attractive for Lithuanian railways to continue supporting exports, but in recent days the issue seems to have political consequences in Vilnius. It is becoming increasingly difficult to continue with exports given the mounting pressure from both sides.
Klaas van der Horst
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