REPORT
By Emre G├╝rkan Abay
Russia letter, March 20

Turkey’s turn in “agriculture chess” with Russia 

Russian media was quite shocked last week with allegations that Turkey began applying an additional 130 percent tax on imports of Russian grain and corn. This move would ensure that Turkey has applied a de facto halt of all imports of these products.

The surprise arose given that Turkey is Russia’s second biggest client in grain after China, with a total of 4.7 million tons of grain imported last year.

Kremlin spokesman Dimitry Peskov immediately made a statement on Friday, saying that a possible “limitation” on Russian grain would not damage the normalization process between Russia and Turkey.

Meanwhile Sergey Balan, the head of the Russian Union of Exporters of Agricultural Products told Anadolu Agency that Turkey’s market is of great importance to Russian grain exporters.

He added that the union wrote a letter to the Russian Ministry of Agriculture in which they requested an immediate resolution to the problem.

The official statement on the allegations came from Turkey’s Ministry of Economy, but the ministry denied the imposition of new tax and said they did not start applying new limitations on any exporting countries.

While the allegations have been denied, it can be concluded that the recent developments show that while Russia is an important market for Turkish exporters, Turkey is also an important market for Russian exporters. The reciprocal application of sanctions shows that their continuance between the two countries needs to be reconsidered.

 

-More good news for Russian economy

The Russian economy continues its positive trend reflected in credit rating agency S&P’s report of an improved outlook for the Russian economy - a view that other major agency Moody’s shared last month.

S&P lifted the outlook to positive from stable, leaving its foreign currency rating one step short of investment grade at BB+.

“External pressures appear to have abated significantly over the last 12-18 months,” S&P said in the statement.

“The positive outlook indicates that we may raise our ratings if the Russian economy continues to adapt to the relatively low oil-price environment while maintaining its strong net external asset position and comparatively low net general government debt burden.”

With the decision from S&P, Russia is now almost on the grade of achieving its investment status, which it lost nearly two years ago, after the imposition of sanctions on its economy amid the crisis in Ukraine. 

20 Mar,2017

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