The latest food and drink exports report for 2015 released by Bord Bia on Wednesday morning paints a stark reminder of the value lost since the closure of the Russian market in August 2014.

Bord Bia estimates that in 2015, the value of exports to Russia were around €50m, a 70% decline in value compared with 2014, with only certain types of ingredients and edible oils exempt from the trade embargo imposed by Russian authorities on food imports from the US, the EU and other countries.

Developing market

The real shame is that Russia has long been targeted as a major growth market by Bord Bia, particularly for dairy products and prepared foods. Years of work went into developing the Russian market and Irish food and drink exports to the world’s ninth-largest economy reached a peak in 2013 when they exceeded more than €232m.

And for the first half of 2014, prior to the implementation of the trade embargo, Irish exports to Russia had been performing strongly, particularly for dairy and beef. In fact, the loss of the Russian market was widely felt across the EU and not just in Ireland.

At the time of the trade ban, Russia had grown to become the EU’s largest dairy market, purchasing 416,000t or 2.5bn litres of dairy product from the EU in 2013, 63% of which was cheese. It was only when EU dairy producers tried to find new markets for the displaced product meant for Russia, especially at a time when global demand was waning due to oversupply, that it became clear just how important the market had been for European dairy.

Self-sufficiency

While Bord Bia is hopeful the Russian market will reopen sooner rather than later and still believes it can be an important market in the longer term for Irish food and drink, the reality is that current government policy in Russia is a continued drive toward self-sufficiency.

While the country’s dairy industry is in need of major overhaul and investment, there is significant potential to increase production from its other sectors. By the time the market does reopen to European food exports, the market demand may have declined from what it was up to now.

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