Five years of food embargo: commentary by Sergei Fomenkov

An article on the results of the five-year food embargo was published on the Agroinvestor magazine website. The material is presented in the form of interviews with experts who commented on the situation in the domestic agro-industrial complex, which has developed over the economic sanctions period. Among the invited experts were the top management representatives of the country’s largest agricultural enterprises, including Sergey Fomenkov, the vice-president for strategy and marketing of the “ECO-Culture” agricultural holding.

Five years ago, Russian President Vladimir Putin signed a decree on special economic measures to ensure food security in the country. A ban was imposed on the import of some goods from the countries participating in the sanctions against Russia. During the embargo period, food imports to Russia have decreased by more than 30 percent. Domestic agricultural producers have managed to increase production volumes to meet the needs of the domestic market and even to establish an active export.

Sergei Fomenkov noted that ECO-Culture began an investment program even before the sanctions were imposed, that is why it turned out to be in a stronger position than other market participants. The embargo caused a deficit of fruits and vegetables, so the prices for these increased, which was a supportive factor for the existing investment projects of the holding and allowed to launch new ones. The market has become more accessible for domestic producers, including ECO-Culture.

However, the situation in the greenhouse sector was still not clear in all aspects: imported seeds and construction materials for the greenhouses became much more expensive. For this reason, alternative solutions had to be sought. According to Sergey Fomenkov, now the share of Russian materials for the greenhouse complexes of the company is 70 per cent. Together with other market participants, the company managed to almost fully localize production. Nevertheless, the holding is still dependent on foreign seed suppliers, while the prices are directly affected by the current exchange rate. Every time the ruble weakens, the costs go up immediately.

Similarly, the embargo has affected other large economies of the country. Thus, the sanctions have opened the domestic market opportunities for fruit, meat, and dairy producers as well.

The full version of the article is available on website.